Correlation Between Dunham High and Dunham Emerging
Can any of the company-specific risk be diversified away by investing in both Dunham High 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 High 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 High Yield and Dunham Emerging Markets, you can compare the effects of market volatilities on Dunham High 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 High with a short position of Dunham Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Dunham Emerging.
Diversification Opportunities for Dunham High and Dunham Emerging
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dunham and Dunham is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield 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 High 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 High Yield 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 High i.e., Dunham High and Dunham Emerging go up and down completely randomly.
Pair Corralation between Dunham High and Dunham Emerging
Assuming the 90 days horizon Dunham High Yield is expected to generate 0.28 times more return on investment than Dunham Emerging. However, Dunham High Yield is 3.63 times less risky than Dunham Emerging. It trades about 0.14 of its potential returns per unit of risk. Dunham Emerging Markets is currently generating about 0.0 per unit of risk. If you would invest 730.00 in Dunham High Yield on October 23, 2024 and sell it today you would earn a total of 141.00 from holding Dunham High Yield or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham High Yield vs. Dunham Emerging Markets
Performance |
| Timeline |
| Dunham High Yield |
| Dunham Emerging Markets |
Dunham High and Dunham Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Dunham Emerging
The main advantage of trading using opposite Dunham High and Dunham Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High 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 High vs. Rational Strategic Allocation | Dunham High vs. Growth Fund Of | Dunham High vs. T Rowe Price | Dunham High vs. Small Cap Stock |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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