Correlation Between Dunham Appreciation and Dunham Dynamic
Can any of the company-specific risk be diversified away by investing in both Dunham Appreciation and Dunham Dynamic 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 Appreciation and Dunham Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Appreciation Income and Dunham Dynamic Macro, you can compare the effects of market volatilities on Dunham Appreciation and Dunham Dynamic 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 Appreciation with a short position of Dunham Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Appreciation and Dunham Dynamic.
Diversification Opportunities for Dunham Appreciation and Dunham Dynamic
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dunham and Dunham is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Appreciation Income and Dunham Dynamic Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Dynamic Macro and Dunham Appreciation 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 Appreciation Income are associated (or correlated) with Dunham Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Dynamic Macro has no effect on the direction of Dunham Appreciation i.e., Dunham Appreciation and Dunham Dynamic go up and down completely randomly.
Pair Corralation between Dunham Appreciation and Dunham Dynamic
Assuming the 90 days horizon Dunham Appreciation is expected to generate 2.61 times less return on investment than Dunham Dynamic. But when comparing it to its historical volatility, Dunham Appreciation Income is 7.96 times less risky than Dunham Dynamic. It trades about 0.3 of its potential returns per unit of risk. Dunham Dynamic Macro is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,093 in Dunham Dynamic Macro on September 14, 2024 and sell it today you would earn a total of 148.00 from holding Dunham Dynamic Macro or generate 13.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Appreciation Income vs. Dunham Dynamic Macro
Performance |
| Timeline |
| Dunham Appreciation |
| Dunham Dynamic Macro |
Dunham Appreciation and Dunham Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Appreciation and Dunham Dynamic
The main advantage of trading using opposite Dunham Appreciation and Dunham Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Appreciation position performs unexpectedly, Dunham Dynamic 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 Dynamic will offset losses from the drop in Dunham Dynamic's long position.| Dunham Appreciation vs. Dunham Dynamic Macro | Dunham Appreciation vs. Dunham Porategovernment Bond | Dunham Appreciation vs. Dunham Small Cap | Dunham Appreciation vs. Dunham Emerging Markets |
| Dunham Dynamic vs. Dunham Dynamic Macro | Dunham Dynamic vs. Dunham Appreciation Income | Dunham Dynamic vs. Dunham Porategovernment Bond | Dunham Dynamic vs. Dunham Small 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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