Correlation Between Dunham Small and Dunham Emerging
Can any of the company-specific risk be diversified away by investing in both Dunham Small 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 Dunham Small and Dunham Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Small Cap and Dunham Emerging Markets, you can compare the effects of market volatilities on Dunham Small 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 Dunham Small with a short position of Dunham Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Small and Dunham Emerging.
Diversification Opportunities for Dunham Small and Dunham Emerging
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dunham and Dunham is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Small Cap 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 Dunham Small 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 Small Cap 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 Dunham Small i.e., Dunham Small and Dunham Emerging go up and down completely randomly.
Pair Corralation between Dunham Small and Dunham Emerging
Assuming the 90 days horizon Dunham Small Cap is expected to generate 1.59 times more return on investment than Dunham Emerging. However, Dunham Small is 1.59 times more volatile than Dunham Emerging Markets. It trades about 0.32 of its potential returns per unit of risk. Dunham Emerging Markets is currently generating about -0.1 per unit of risk. If you would invest 1,924 in Dunham Small Cap on September 1, 2024 and sell it today you would earn a total of 187.00 from holding Dunham Small Cap or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dunham Small Cap vs. Dunham Emerging Markets
Performance |
| Timeline |
| Dunham Small Cap |
| Dunham Emerging Markets |
Dunham Small and Dunham Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Small and Dunham Emerging
The main advantage of trading using opposite Dunham Small and Dunham Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Small 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.| Dunham Small vs. Ivy Energy Fund | Dunham Small vs. Goehring Rozencwajg Resources | Dunham Small vs. Firsthand Alternative Energy | Dunham Small vs. Alpsalerian Energy Infrastructure |
| Dunham Emerging vs. Harbor Vertible Securities | Dunham Emerging vs. Absolute Convertible Arbitrage | Dunham Emerging vs. The Gamco Global | Dunham Emerging vs. Fidelity Sai 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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