Correlation Between Dunham Emerging and Dunham Small
Can any of the company-specific risk be diversified away by investing in both Dunham Emerging and Dunham Small 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 Dunham Small 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 Dunham Small Cap, you can compare the effects of market volatilities on Dunham Emerging and Dunham Small 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 Dunham Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Emerging and Dunham Small.
Diversification Opportunities for Dunham Emerging and Dunham Small
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dunham and Dunham is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Emerging Markets and Dunham Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Small 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 Dunham Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Small Cap has no effect on the direction of Dunham Emerging i.e., Dunham Emerging and Dunham Small go up and down completely randomly.
Pair Corralation between Dunham Emerging and Dunham Small
Assuming the 90 days horizon Dunham Emerging is expected to generate 2.78 times less return on investment than Dunham Small. But when comparing it to its historical volatility, Dunham Emerging Markets is 1.26 times less risky than Dunham Small. It trades about 0.03 of its potential returns per unit of risk. Dunham Small Cap is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,519 in Dunham Small Cap on September 3, 2024 and sell it today you would earn a total of 598.00 from holding Dunham Small Cap or generate 39.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Emerging Markets vs. Dunham Small Cap
Performance |
| Timeline |
| Dunham Emerging Markets |
| Dunham Small Cap |
Dunham Emerging and Dunham Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Emerging and Dunham Small
The main advantage of trading using opposite Dunham Emerging and Dunham Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Emerging position performs unexpectedly, Dunham Small 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 Small will offset losses from the drop in Dunham Small's long position.| Dunham Emerging vs. T Rowe Price | Dunham Emerging vs. Transamerica Funds | Dunham Emerging vs. Intermediate Term Tax Free Bond | Dunham Emerging vs. Ab Impact Municipal |
| Dunham Small vs. Jhancock Diversified Macro | Dunham Small vs. Calvert Conservative Allocation | Dunham Small vs. Harbor Diversified International | Dunham Small vs. Fidelity Advisor Diversified |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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