Correlation Between Dunham Emerging and Locorr Market
Can any of the company-specific risk be diversified away by investing in both Dunham Emerging and Locorr Market 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 Locorr Market 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 Locorr Market Trend, you can compare the effects of market volatilities on Dunham Emerging and Locorr Market 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 Locorr Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Emerging and Locorr Market.
Diversification Opportunities for Dunham Emerging and Locorr Market
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dunham and Locorr is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Emerging Markets and Locorr Market Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Market Trend 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 Locorr Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Market Trend has no effect on the direction of Dunham Emerging i.e., Dunham Emerging and Locorr Market go up and down completely randomly.
Pair Corralation between Dunham Emerging and Locorr Market
Assuming the 90 days horizon Dunham Emerging Markets is expected to under-perform the Locorr Market. In addition to that, Dunham Emerging is 1.78 times more volatile than Locorr Market Trend. It trades about -0.2 of its total potential returns per unit of risk. Locorr Market Trend is currently generating about 0.05 per unit of volatility. If you would invest 1,032 in Locorr Market Trend on October 9, 2024 and sell it today you would earn a total of 4.00 from holding Locorr Market Trend or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Emerging Markets vs. Locorr Market Trend
Performance |
| Timeline |
| Dunham Emerging Markets |
| Locorr Market Trend |
Dunham Emerging and Locorr Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Emerging and Locorr Market
The main advantage of trading using opposite Dunham Emerging and Locorr Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Emerging position performs unexpectedly, Locorr Market 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 Locorr Market will offset losses from the drop in Locorr Market's long position.| Dunham Emerging vs. Dunham Dynamic Macro | Dunham Emerging vs. Dunham Porategovernment Bond | Dunham Emerging vs. Dunham Focused Large | Dunham Emerging vs. Dunham International Opportunity |
| Locorr Market vs. Nuveen Strategic Municipal | Locorr Market vs. Artisan High Income | Locorr Market vs. T Rowe Price | Locorr Market vs. Leader Short Term 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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