Correlation Between Enhanced and Dunham Emerging
Can any of the company-specific risk be diversified away by investing in both Enhanced and Dunham Emerging 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 Enhanced and Dunham Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enhanced Large Pany and Dunham Emerging Markets, you can compare the effects of market volatilities on Enhanced and Dunham Emerging 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 Enhanced with a short position of Dunham Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enhanced and Dunham Emerging.
Diversification Opportunities for Enhanced and Dunham Emerging
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enhanced and Dunham is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Enhanced Large Pany and Dunham Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Emerging Markets and Enhanced 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 Enhanced Large Pany are associated (or correlated) with Dunham Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Emerging Markets has no effect on the direction of Enhanced i.e., Enhanced and Dunham Emerging go up and down completely randomly.
Pair Corralation between Enhanced and Dunham Emerging
Assuming the 90 days horizon Enhanced Large Pany is expected to under-perform the Dunham Emerging. In addition to that, Enhanced is 1.45 times more volatile than Dunham Emerging Markets. It trades about -0.19 of its total potential returns per unit of risk. Dunham Emerging Markets is currently generating about -0.2 per unit of volatility. If you would invest 1,393 in Dunham Emerging Markets on October 8, 2024 and sell it today you would lose (40.00) from holding Dunham Emerging Markets or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enhanced Large Pany vs. Dunham Emerging Markets
Performance |
| Timeline |
| Enhanced Large Pany |
| Dunham Emerging Markets |
Enhanced and Dunham Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enhanced and Dunham Emerging
The main advantage of trading using opposite Enhanced and Dunham Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enhanced position performs unexpectedly, Dunham Emerging 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 Dunham Emerging will offset losses from the drop in Dunham Emerging's long position.| Enhanced vs. Us Micro Cap | Enhanced vs. Dfa Short Term Government | Enhanced vs. Emerging Markets Small | Enhanced vs. Dfa One Year Fixed |
| Dunham Emerging vs. Ab High Income | Dunham Emerging vs. Inverse High Yield | Dunham Emerging vs. Multi Manager High Yield | Dunham Emerging vs. Needham Aggressive Growth |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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