Correlation Between Dunham High and Gmo Resources
Can any of the company-specific risk be diversified away by investing in both Dunham High and Gmo Resources 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 Gmo Resources 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 Gmo Resources, you can compare the effects of market volatilities on Dunham High and Gmo Resources 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 Gmo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Gmo Resources.
Diversification Opportunities for Dunham High and Gmo Resources
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dunham and Gmo is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Gmo Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Resources 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 Gmo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Resources has no effect on the direction of Dunham High i.e., Dunham High and Gmo Resources go up and down completely randomly.
Pair Corralation between Dunham High and Gmo Resources
Assuming the 90 days horizon Dunham High Yield is expected to generate 0.19 times more return on investment than Gmo Resources. However, Dunham High Yield is 5.37 times less risky than Gmo Resources. It trades about 0.27 of its potential returns per unit of risk. Gmo Resources is currently generating about -0.13 per unit of risk. If you would invest 865.00 in Dunham High Yield on November 9, 2024 and sell it today you would earn a total of 9.00 from holding Dunham High Yield or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham High Yield vs. Gmo Resources
Performance |
| Timeline |
| Dunham High Yield |
| Gmo Resources |
Dunham High and Gmo Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Gmo Resources
The main advantage of trading using opposite Dunham High and Gmo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High position performs unexpectedly, Gmo Resources 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 Gmo Resources will offset losses from the drop in Gmo Resources' long position.| Dunham High vs. Science Technology Fund | Dunham High vs. Invesco Technology Fund | Dunham High vs. Red Oak Technology | Dunham High vs. Columbia Global Technology |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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