Correlation Between Dunham Real and Cognios Market
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Cognios Market at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dunham Real and Cognios Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Real Estate and Cognios Market Neutral, you can compare the effects of market volatilities on Dunham Real and Cognios Market and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dunham Real with a short position of Cognios Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Cognios Market.
Diversification Opportunities for Dunham Real and Cognios Market
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dunham and Cognios is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Cognios Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognios Market Neutral and Dunham Real is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dunham Real Estate are associated (or correlated) with Cognios Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognios Market Neutral has no effect on the direction of Dunham Real i.e., Dunham Real and Cognios Market go up and down completely randomly.
Pair Corralation between Dunham Real and Cognios Market
Assuming the 90 days horizon Dunham Real Estate is expected to generate 10.48 times more return on investment than Cognios Market. However, Dunham Real is 10.48 times more volatile than Cognios Market Neutral. It trades about 0.26 of its potential returns per unit of risk. Cognios Market Neutral is currently generating about -0.19 per unit of risk. If you would invest 1,470 in Dunham Real Estate on September 1, 2024 and sell it today you would earn a total of 66.00 from holding Dunham Real Estate or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Real Estate vs. Cognios Market Neutral
Performance |
| Timeline |
| Dunham Real Estate |
| Cognios Market Neutral |
Dunham Real and Cognios Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and Cognios Market
The main advantage of trading using opposite Dunham Real and Cognios Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Cognios Market can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cognios Market will offset losses from the drop in Cognios Market's long position.| Dunham Real vs. Growth Opportunities Fund | Dunham Real vs. Nasdaq 100 Index Fund | Dunham Real vs. Eic Value Fund | Dunham Real vs. Auer Growth Fund |
| Cognios Market vs. Vy Goldman Sachs | Cognios Market vs. Sprott Gold Equity | Cognios Market vs. Global Gold Fund | Cognios Market vs. International Investors Gold |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
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