Correlation Between Dunham Real and Western Asset
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Western Asset 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 Western Asset 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 Western Asset E, you can compare the effects of market volatilities on Dunham Real and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Western Asset.
Diversification Opportunities for Dunham Real and Western Asset
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dunham and Western is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset E has no effect on the direction of Dunham Real i.e., Dunham Real and Western Asset go up and down completely randomly.
Pair Corralation between Dunham Real and Western Asset
Assuming the 90 days horizon Dunham Real Estate is expected to generate 2.45 times more return on investment than Western Asset. However, Dunham Real is 2.45 times more volatile than Western Asset E. It trades about 0.03 of its potential returns per unit of risk. Western Asset E is currently generating about -0.19 per unit of risk. If you would invest 1,520 in Dunham Real Estate on August 30, 2024 and sell it today you would earn a total of 13.00 from holding Dunham Real Estate or generate 0.86% 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. Western Asset E
Performance |
| Timeline |
| Dunham Real Estate |
| Western Asset E |
Dunham Real and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and Western Asset
The main advantage of trading using opposite Dunham Real and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Dunham Real vs. Realty Income | Dunham Real vs. Dynex Capital | Dunham Real vs. First Industrial Realty | Dunham Real vs. Healthcare Realty Trust |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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