Correlation Between Dunham Emerging and Davis Financial
Can any of the company-specific risk be diversified away by investing in both Dunham Emerging and Davis Financial 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 Davis Financial 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 Davis Financial Fund, you can compare the effects of market volatilities on Dunham Emerging and Davis Financial 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 Davis Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Emerging and Davis Financial.
Diversification Opportunities for Dunham Emerging and Davis Financial
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dunham and Davis is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Emerging Markets and Davis Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Davis Financial 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 Davis Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Davis Financial has no effect on the direction of Dunham Emerging i.e., Dunham Emerging and Davis Financial go up and down completely randomly.
Pair Corralation between Dunham Emerging and Davis Financial
Assuming the 90 days horizon Dunham Emerging is expected to generate 19.61 times less return on investment than Davis Financial. But when comparing it to its historical volatility, Dunham Emerging Markets is 1.03 times less risky than Davis Financial. It trades about 0.02 of its potential returns per unit of risk. Davis Financial Fund is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 6,641 in Davis Financial Fund on November 3, 2024 and sell it today you would earn a total of 453.00 from holding Davis Financial Fund or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Emerging Markets vs. Davis Financial Fund
Performance |
| Timeline |
| Dunham Emerging Markets |
| Davis Financial |
Dunham Emerging and Davis Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Emerging and Davis Financial
The main advantage of trading using opposite Dunham Emerging and Davis Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Emerging position performs unexpectedly, Davis Financial 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 Davis Financial will offset losses from the drop in Davis Financial's long position.| Dunham Emerging vs. Gmo Global Equity | Dunham Emerging vs. Doubleline Core Fixed | Dunham Emerging vs. Small Cap Equity | Dunham Emerging vs. Dws Equity Sector |
| Davis Financial vs. Needham Small Cap | Davis Financial vs. Praxis Small Cap | Davis Financial vs. Smallcap Fund Fka | Davis Financial vs. Touchstone Small Cap |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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