Correlation Between Dunham Real and Federated Fund
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Federated Fund 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 Federated Fund 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 Federated Fund For, you can compare the effects of market volatilities on Dunham Real and Federated Fund 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 Federated Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Federated Fund.
Diversification Opportunities for Dunham Real and Federated Fund
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dunham and Federated is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Federated Fund For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Fund For 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 Federated Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Fund For has no effect on the direction of Dunham Real i.e., Dunham Real and Federated Fund go up and down completely randomly.
Pair Corralation between Dunham Real and Federated Fund
Assuming the 90 days horizon Dunham Real Estate is expected to generate 2.51 times more return on investment than Federated Fund. However, Dunham Real is 2.51 times more volatile than Federated Fund For. It trades about 0.04 of its potential returns per unit of risk. Federated Fund For is currently generating about 0.01 per unit of risk. If you would invest 1,280 in Dunham Real Estate on September 3, 2024 and sell it today you would earn a total of 242.00 from holding Dunham Real Estate or generate 18.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Real Estate vs. Federated Fund For
Performance |
| Timeline |
| Dunham Real Estate |
| Federated Fund For |
Dunham Real and Federated Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and Federated Fund
The main advantage of trading using opposite Dunham Real and Federated Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Federated Fund 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 Federated Fund will offset losses from the drop in Federated Fund's long position.| Dunham Real vs. Ep Emerging Markets | Dunham Real vs. Rbc Emerging Markets | Dunham Real vs. Transamerica Emerging Markets | Dunham Real vs. T Rowe Price |
| Federated Fund vs. Ep Emerging Markets | Federated Fund vs. Western Assets Emerging | Federated Fund vs. Morgan Stanley Emerging | Federated Fund vs. Massmutual Select Diversified |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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