Correlation Between Dunham Emerging and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Dunham Emerging and Investec 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 Emerging and Investec Emerging 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 Investec Emerging Markets, you can compare the effects of market volatilities on Dunham Emerging and Investec 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 Emerging with a short position of Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Emerging and Investec Emerging.
Diversification Opportunities for Dunham Emerging and Investec Emerging
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dunham and Investec is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Emerging Markets and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets 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 Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Dunham Emerging i.e., Dunham Emerging and Investec Emerging go up and down completely randomly.
Pair Corralation between Dunham Emerging and Investec Emerging
Assuming the 90 days horizon Dunham Emerging Markets is expected to generate 1.15 times more return on investment than Investec Emerging. However, Dunham Emerging is 1.15 times more volatile than Investec Emerging Markets. It trades about -0.2 of its potential returns per unit of risk. Investec Emerging Markets is currently generating about -0.26 per unit of risk. If you would invest 1,432 in Dunham Emerging Markets on October 9, 2024 and sell it today you would lose (41.00) from holding Dunham Emerging Markets or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Emerging Markets vs. Investec Emerging Markets
Performance |
| Timeline |
| Dunham Emerging Markets |
| Investec Emerging Markets |
Dunham Emerging and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Emerging and Investec Emerging
The main advantage of trading using opposite Dunham Emerging and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Emerging position performs unexpectedly, Investec 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 Investec Emerging will offset losses from the drop in Investec Emerging'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 |
| Investec Emerging vs. Large Cap Growth Profund | Investec Emerging vs. Tax Managed Large Cap | Investec Emerging vs. Transamerica Large Cap | Investec Emerging vs. Guidemark 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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