Correlation Between Dunham Real and Power Momentum
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Power Momentum 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 Power Momentum 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 Power Momentum Index, you can compare the effects of market volatilities on Dunham Real and Power Momentum 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 Power Momentum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Power Momentum.
Diversification Opportunities for Dunham Real and Power Momentum
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dunham and Power is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Power Momentum Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Momentum Index 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 Power Momentum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Momentum Index has no effect on the direction of Dunham Real i.e., Dunham Real and Power Momentum go up and down completely randomly.
Pair Corralation between Dunham Real and Power Momentum
Assuming the 90 days horizon Dunham Real Estate is expected to generate 0.98 times more return on investment than Power Momentum. However, Dunham Real Estate is 1.02 times less risky than Power Momentum. It trades about 0.05 of its potential returns per unit of risk. Power Momentum Index is currently generating about -0.03 per unit of risk. If you would invest 1,486 in Dunham Real Estate on September 12, 2024 and sell it today you would earn a total of 11.00 from holding Dunham Real Estate or generate 0.74% 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. Power Momentum Index
Performance |
| Timeline |
| Dunham Real Estate |
| Power Momentum Index |
Dunham Real and Power Momentum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and Power Momentum
The main advantage of trading using opposite Dunham Real and Power Momentum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Power Momentum 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 Power Momentum will offset losses from the drop in Power Momentum's long position.| Dunham Real vs. Oppenheimer Gold Special | Dunham Real vs. Gabelli Gold Fund | Dunham Real vs. Goldman Sachs Clean | Dunham Real vs. Vy Goldman Sachs |
| Power Momentum vs. Vanguard Financials Index | Power Momentum vs. Prudential Jennison Financial | Power Momentum vs. Gabelli Global Financial | Power Momentum vs. Fidelity Advisor Financial |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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