Correlation Between Dunham Real and World Energy
Can any of the company-specific risk be diversified away by investing in both Dunham Real and World Energy 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 World Energy 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 World Energy Fund, you can compare the effects of market volatilities on Dunham Real and World Energy 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 World Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and World Energy.
Diversification Opportunities for Dunham Real and World Energy
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dunham and World is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and World Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Energy 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 World Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Energy has no effect on the direction of Dunham Real i.e., Dunham Real and World Energy go up and down completely randomly.
Pair Corralation between Dunham Real and World Energy
Assuming the 90 days horizon Dunham Real is expected to generate 1.19 times less return on investment than World Energy. In addition to that, Dunham Real is 1.01 times more volatile than World Energy Fund. It trades about 0.06 of its total potential returns per unit of risk. World Energy Fund is currently generating about 0.07 per unit of volatility. If you would invest 1,172 in World Energy Fund on August 31, 2024 and sell it today you would earn a total of 374.00 from holding World Energy Fund or generate 31.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Dunham Real Estate vs. World Energy Fund
Performance |
| Timeline |
| Dunham Real Estate |
| World Energy |
Dunham Real and World Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and World Energy
The main advantage of trading using opposite Dunham Real and World Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, World Energy 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 World Energy will offset losses from the drop in World Energy's long position.| Dunham Real vs. Fidelity Series 1000 | Dunham Real vs. Fundamental Large Cap | Dunham Real vs. Large Cap Growth Profund | Dunham Real vs. Jhancock Disciplined Value |
| World Energy vs. Columbia Vertible Securities | World Energy vs. Advent Claymore Convertible | World Energy vs. Absolute Convertible Arbitrage | World Energy vs. Calamos Dynamic Convertible |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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