Correlation Between Dunham Real and Scout Small
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Scout Small 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 Scout Small 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 Scout Small Cap, you can compare the effects of market volatilities on Dunham Real and Scout Small 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 Scout Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Scout Small.
Diversification Opportunities for Dunham Real and Scout Small
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dunham and Scout is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Scout Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout Small Cap 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 Scout Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout Small Cap has no effect on the direction of Dunham Real i.e., Dunham Real and Scout Small go up and down completely randomly.
Pair Corralation between Dunham Real and Scout Small
Assuming the 90 days horizon Dunham Real is expected to generate 1.41 times less return on investment than Scout Small. But when comparing it to its historical volatility, Dunham Real Estate is 1.04 times less risky than Scout Small. It trades about 0.04 of its potential returns per unit of risk. Scout Small Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,628 in Scout Small Cap on September 4, 2024 and sell it today you would earn a total of 855.00 from holding Scout Small Cap or generate 32.53% 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. Scout Small Cap
Performance |
| Timeline |
| Dunham Real Estate |
| Scout Small Cap |
Dunham Real and Scout Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and Scout Small
The main advantage of trading using opposite Dunham Real and Scout Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Scout Small 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 Scout Small will offset losses from the drop in Scout Small's long position.| Dunham Real vs. T Rowe Price | Dunham Real vs. T Rowe Price | Dunham Real vs. T Rowe Price | Dunham Real vs. T Rowe Price |
| Scout Small vs. Chartwell Short Duration | Scout Small vs. Carillon Chartwell Short | Scout Small vs. Chartwell Short Duration | Scout Small vs. Carillon Chartwell Short |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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