Correlation Between Centre American and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Centre American and Dunham Real 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 Centre American and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centre American Select and Dunham Real Estate, you can compare the effects of market volatilities on Centre American and Dunham Real 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 Centre American with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centre American and Dunham Real.
Diversification Opportunities for Centre American and Dunham Real
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Centre and Dunham is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Centre American Select and Dunham Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Real Estate and Centre American 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 Centre American Select are associated (or correlated) with Dunham Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Real Estate has no effect on the direction of Centre American i.e., Centre American and Dunham Real go up and down completely randomly.
Pair Corralation between Centre American and Dunham Real
Assuming the 90 days horizon Centre American Select is expected to under-perform the Dunham Real. In addition to that, Centre American is 2.52 times more volatile than Dunham Real Estate. It trades about -0.2 of its total potential returns per unit of risk. Dunham Real Estate is currently generating about 0.14 per unit of volatility. If you would invest 1,383 in Dunham Real Estate on October 21, 2024 and sell it today you would earn a total of 35.00 from holding Dunham Real Estate or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centre American Select vs. Dunham Real Estate
Performance |
| Timeline |
| Centre American Select |
| Dunham Real Estate |
Centre American and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centre American and Dunham Real
The main advantage of trading using opposite Centre American and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centre American position performs unexpectedly, Dunham Real 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 Real will offset losses from the drop in Dunham Real's long position.| Centre American vs. Centre Global Infrastructure | Centre American vs. Centre American Select | Centre American vs. Massmutual Premier High | Centre American vs. Neuberger Berman Long |
| Dunham Real vs. Hewitt Money Market | Dunham Real vs. Pioneer Money Market | Dunham Real vs. Money Market Obligations | Dunham Real vs. Ab Government Exchange |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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