Correlation Between Dunham Large and Blue Chip
Can any of the company-specific risk be diversified away by investing in both Dunham Large and Blue Chip 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 Blue Chip 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 Blue Chip Growth, you can compare the effects of market volatilities on Dunham Large and Blue Chip 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 Blue Chip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and Blue Chip.
Diversification Opportunities for Dunham Large and Blue Chip
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dunham and Blue is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Blue Chip Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Chip Growth 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 Blue Chip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Chip Growth has no effect on the direction of Dunham Large i.e., Dunham Large and Blue Chip go up and down completely randomly.
Pair Corralation between Dunham Large and Blue Chip
Assuming the 90 days horizon Dunham Large is expected to generate 1.57 times less return on investment than Blue Chip. But when comparing it to its historical volatility, Dunham Large Cap is 1.91 times less risky than Blue Chip. It trades about 0.06 of its potential returns per unit of risk. Blue Chip Growth is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,496 in Blue Chip Growth on September 2, 2024 and sell it today you would earn a total of 487.00 from holding Blue Chip Growth or generate 32.55% 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. Blue Chip Growth
Performance |
| Timeline |
| Dunham Large Cap |
| Blue Chip Growth |
Dunham Large and Blue Chip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Large and Blue Chip
The main advantage of trading using opposite Dunham Large and Blue Chip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large position performs unexpectedly, Blue Chip 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 Blue Chip will offset losses from the drop in Blue Chip's long position.| Dunham Large vs. Dunham Dynamic Macro | Dunham Large vs. Dunham Appreciation Income | Dunham Large vs. Dunham Small Cap | Dunham Large vs. Dunham Emerging Markets |
| Blue Chip vs. Qs Large Cap | Blue Chip vs. American Mutual Fund | Blue Chip vs. Qs Large Cap | Blue Chip vs. Dunham Large 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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