Correlation Between Dunham High and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Dunham High and Dunham Real 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 Real 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 Real Estate, you can compare the effects of market volatilities on Dunham High and Dunham Real 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 Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Dunham Real.
Diversification Opportunities for Dunham High and Dunham Real
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dunham and Dunham is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Dunham Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Real Estate 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 Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Real Estate has no effect on the direction of Dunham High i.e., Dunham High and Dunham Real go up and down completely randomly.
Pair Corralation between Dunham High and Dunham Real
Assuming the 90 days horizon Dunham High is expected to generate 1.95 times less return on investment than Dunham Real. But when comparing it to its historical volatility, Dunham High Yield is 6.7 times less risky than Dunham Real. It trades about 0.33 of its potential returns per unit of risk. Dunham Real Estate is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,497 in Dunham Real Estate on August 31, 2024 and sell it today you would earn a total of 29.00 from holding Dunham Real Estate or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham High Yield vs. Dunham Real Estate
Performance |
| Timeline |
| Dunham High Yield |
| Dunham Real Estate |
Dunham High and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Dunham Real
The main advantage of trading using opposite Dunham High and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High position performs unexpectedly, Dunham Real 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 Real will offset losses from the drop in Dunham Real's long position.| Dunham High vs. Vanguard High Yield Corporate | Dunham High vs. Vanguard High Yield Porate | Dunham High vs. Blackrock Hi Yld | Dunham High vs. Blackrock High Yield |
| Dunham Real vs. Artisan High Income | Dunham Real vs. Maryland Tax Free Bond | Dunham Real vs. Bbh Intermediate Municipal | Dunham Real vs. Transamerica Intermediate Muni |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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