Correlation Between Dunham Real and Dfa International
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Dfa International 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 Dfa International 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 Dfa International Social, you can compare the effects of market volatilities on Dunham Real and Dfa International 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 Dfa International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Dfa International.
Diversification Opportunities for Dunham Real and Dfa International
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dunham and Dfa is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Dfa International Social in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa International Social 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 Dfa International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa International Social has no effect on the direction of Dunham Real i.e., Dunham Real and Dfa International go up and down completely randomly.
Pair Corralation between Dunham Real and Dfa International
Assuming the 90 days horizon Dunham Real Estate is expected to generate 0.91 times more return on investment than Dfa International. However, Dunham Real Estate is 1.1 times less risky than Dfa International. It trades about 0.37 of its potential returns per unit of risk. Dfa International Social is currently generating about 0.04 per unit of risk. If you would invest 1,450 in Dunham Real Estate on September 2, 2024 and sell it today you would earn a total of 86.00 from holding Dunham Real Estate or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Real Estate vs. Dfa International Social
Performance |
| Timeline |
| Dunham Real Estate |
| Dfa International Social |
Dunham Real and Dfa International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and Dfa International
The main advantage of trading using opposite Dunham Real and Dfa International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Dfa International 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 Dfa International will offset losses from the drop in Dfa International's long position.| Dunham Real vs. Government Securities Fund | Dunham Real vs. Franklin Adjustable Government | Dunham Real vs. Goldman Sachs Government | Dunham Real vs. Virtus Seix Government |
| Dfa International vs. Intal High Relative | Dfa International vs. Dfa International | Dfa International vs. Dfa Inflation Protected | Dfa International vs. Dfa International Small |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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