Correlation Between Dunham Corporate/govern and Voya Bond
Can any of the company-specific risk be diversified away by investing in both Dunham Corporate/govern and Voya Bond 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 Corporate/govern and Voya Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Porategovernment Bond and Voya Bond Index, you can compare the effects of market volatilities on Dunham Corporate/govern and Voya Bond 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 Corporate/govern with a short position of Voya Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Corporate/govern and Voya Bond.
Diversification Opportunities for Dunham Corporate/govern and Voya Bond
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dunham and Voya is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Voya Bond Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Bond Index and Dunham Corporate/govern 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 Porategovernment Bond are associated (or correlated) with Voya Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Bond Index has no effect on the direction of Dunham Corporate/govern i.e., Dunham Corporate/govern and Voya Bond go up and down completely randomly.
Pair Corralation between Dunham Corporate/govern and Voya Bond
Assuming the 90 days horizon Dunham Porategovernment Bond is expected to generate 0.82 times more return on investment than Voya Bond. However, Dunham Porategovernment Bond is 1.22 times less risky than Voya Bond. It trades about 0.05 of its potential returns per unit of risk. Voya Bond Index is currently generating about 0.03 per unit of risk. If you would invest 1,162 in Dunham Porategovernment Bond on November 1, 2024 and sell it today you would earn a total of 88.00 from holding Dunham Porategovernment Bond or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Voya Bond Index
Performance |
| Timeline |
| Dunham Porategovernment |
| Voya Bond Index |
Dunham Corporate/govern and Voya Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Corporate/govern and Voya Bond
The main advantage of trading using opposite Dunham Corporate/govern and Voya Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Corporate/govern position performs unexpectedly, Voya Bond 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 Voya Bond will offset losses from the drop in Voya Bond's long position.The idea behind Dunham Porategovernment Bond and Voya Bond Index pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Voya Bond vs. Inverse Government Long | Voya Bond vs. Federated Government Ultrashort | Voya Bond vs. Hsbc Government Money | Voya Bond vs. Dunham Porategovernment Bond |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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