Correlation Between Dunham Large and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both Dunham Large and Fidelity Series 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 Large and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Large Cap and Fidelity Series 1000, you can compare the effects of market volatilities on Dunham Large and Fidelity Series 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 Large with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and Fidelity Series.
Diversification Opportunities for Dunham Large and Fidelity Series
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Dunham and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Fidelity Series 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series 1000 and Dunham Large 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 Large Cap are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series 1000 has no effect on the direction of Dunham Large i.e., Dunham Large and Fidelity Series go up and down completely randomly.
Pair Corralation between Dunham Large and Fidelity Series
Assuming the 90 days horizon Dunham Large is expected to generate 1.17 times less return on investment than Fidelity Series. But when comparing it to its historical volatility, Dunham Large Cap is 1.07 times less risky than Fidelity Series. It trades about 0.15 of its potential returns per unit of risk. Fidelity Series 1000 is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,714 in Fidelity Series 1000 on August 31, 2024 and sell it today you would earn a total of 86.00 from holding Fidelity Series 1000 or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Large Cap vs. Fidelity Series 1000
Performance |
| Timeline |
| Dunham Large Cap |
| Fidelity Series 1000 |
Dunham Large and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Large and Fidelity Series
The main advantage of trading using opposite Dunham Large and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large position performs unexpectedly, Fidelity Series 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 Fidelity Series will offset losses from the drop in Fidelity Series' long position.| Dunham Large vs. Dodge Cox Stock | Dunham Large vs. American Mutual Fund | Dunham Large vs. American Funds American | Dunham Large vs. American Funds American |
| Fidelity Series vs. Pgim Conservative Retirement | Fidelity Series vs. Delaware Limited Term Diversified | Fidelity Series vs. Pioneer Diversified High | Fidelity Series vs. Evaluator Conservative Rms |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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