Correlation Between Dunham Emerging and National Tax
Can any of the company-specific risk be diversified away by investing in both Dunham Emerging and National Tax 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 Emerging and National Tax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Emerging Markets and The National Tax Free, you can compare the effects of market volatilities on Dunham Emerging and National Tax 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 Emerging with a short position of National Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Emerging and National Tax.
Diversification Opportunities for Dunham Emerging and National Tax
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dunham and National is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Emerging Markets and The National Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Tax and Dunham Emerging 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 Emerging Markets are associated (or correlated) with National Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Tax has no effect on the direction of Dunham Emerging i.e., Dunham Emerging and National Tax go up and down completely randomly.
Pair Corralation between Dunham Emerging and National Tax
Assuming the 90 days horizon Dunham Emerging Markets is expected to generate 4.74 times more return on investment than National Tax. However, Dunham Emerging is 4.74 times more volatile than The National Tax Free. It trades about 0.03 of its potential returns per unit of risk. The National Tax Free is currently generating about 0.07 per unit of risk. If you would invest 1,107 in Dunham Emerging Markets on September 12, 2024 and sell it today you would earn a total of 152.00 from holding Dunham Emerging Markets or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Emerging Markets vs. The National Tax Free
Performance |
| Timeline |
| Dunham Emerging Markets |
| National Tax |
Dunham Emerging and National Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Emerging and National Tax
The main advantage of trading using opposite Dunham Emerging and National Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Emerging position performs unexpectedly, National Tax 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 National Tax will offset losses from the drop in National Tax's long position.| Dunham Emerging vs. Fidelity Small Cap | Dunham Emerging vs. Royce Opportunity Fund | Dunham Emerging vs. Fpa Queens Road | Dunham Emerging vs. Queens Road Small |
| National Tax vs. Tax Exempt Bond | National Tax vs. Blackrock National Municipal | National Tax vs. SCOR PK | National Tax vs. Morningstar Unconstrained Allocation |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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