Correlation Between Dunham Real and Active Bond
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Active Bond 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 Active Bond 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 Active Bond Fund, you can compare the effects of market volatilities on Dunham Real and Active Bond 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 Active Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Active Bond.
Diversification Opportunities for Dunham Real and Active Bond
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dunham and Active is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Active Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Active Bond Fund 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 Active Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Active Bond Fund has no effect on the direction of Dunham Real i.e., Dunham Real and Active Bond go up and down completely randomly.
Pair Corralation between Dunham Real and Active Bond
Assuming the 90 days horizon Dunham Real Estate is expected to generate 2.72 times more return on investment than Active Bond. However, Dunham Real is 2.72 times more volatile than Active Bond Fund. It trades about 0.06 of its potential returns per unit of risk. Active Bond Fund is currently generating about -0.11 per unit of risk. If you would invest 1,502 in Dunham Real Estate on September 3, 2024 and sell it today you would earn a total of 34.00 from holding Dunham Real Estate or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Real Estate vs. Active Bond Fund
Performance |
| Timeline |
| Dunham Real Estate |
| Active Bond Fund |
Dunham Real and Active Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and Active Bond
The main advantage of trading using opposite Dunham Real and Active Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Active Bond 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 Active Bond will offset losses from the drop in Active Bond'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 |
| Active Bond vs. Vanguard Reit Index | Active Bond vs. Simt Real Estate | Active Bond vs. Dunham Real Estate | Active Bond vs. Columbia Real Estate |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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