Correlation Between Dunham Emerging and Ab Large
Can any of the company-specific risk be diversified away by investing in both Dunham Emerging and Ab Large 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 Emerging and Ab Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Emerging Markets and Ab Large Cap, you can compare the effects of market volatilities on Dunham Emerging and Ab Large 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 Emerging with a short position of Ab Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Emerging and Ab Large.
Diversification Opportunities for Dunham Emerging and Ab Large
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DUNHAM and ALCKX is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Emerging Markets and Ab Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Large Cap and Dunham Emerging 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 Emerging Markets are associated (or correlated) with Ab Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Large Cap has no effect on the direction of Dunham Emerging i.e., Dunham Emerging and Ab Large go up and down completely randomly.
Pair Corralation between Dunham Emerging and Ab Large
Assuming the 90 days horizon Dunham Emerging Markets is expected to under-perform the Ab Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dunham Emerging Markets is 1.47 times less risky than Ab Large. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Ab Large Cap is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9,964 in Ab Large Cap on October 23, 2024 and sell it today you would earn a total of 21.00 from holding Ab Large Cap or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Emerging Markets vs. Ab Large Cap
Performance |
| Timeline |
| Dunham Emerging Markets |
| Ab Large Cap |
Dunham Emerging and Ab Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Emerging and Ab Large
The main advantage of trading using opposite Dunham Emerging and Ab Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Emerging position performs unexpectedly, Ab Large 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 Ab Large will offset losses from the drop in Ab Large's long position.| Dunham Emerging vs. Franklin Small Cap | Dunham Emerging vs. Rbc Small Cap | Dunham Emerging vs. Ab Small Cap | Dunham Emerging vs. Needham Aggressive Growth |
| Ab Large vs. Ab Large Cap | Ab Large vs. Select Fund R6 | Ab Large vs. Ab Large Cap | Ab Large vs. Ab Large 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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