Correlation Between Dunham High and Advantage Portfolio
Can any of the company-specific risk be diversified away by investing in both Dunham High and Advantage Portfolio 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 Advantage Portfolio 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 Advantage Portfolio Class, you can compare the effects of market volatilities on Dunham High and Advantage Portfolio 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 Advantage Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Advantage Portfolio.
Diversification Opportunities for Dunham High and Advantage Portfolio
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dunham and Advantage is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Advantage Portfolio Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Portfolio Class 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 Advantage Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Portfolio Class has no effect on the direction of Dunham High i.e., Dunham High and Advantage Portfolio go up and down completely randomly.
Pair Corralation between Dunham High and Advantage Portfolio
Assuming the 90 days horizon Dunham High Yield is expected to generate 0.15 times more return on investment than Advantage Portfolio. However, Dunham High Yield is 6.9 times less risky than Advantage Portfolio. It trades about -0.3 of its potential returns per unit of risk. Advantage Portfolio Class is currently generating about -0.12 per unit of risk. If you would invest 879.00 in Dunham High Yield on October 12, 2024 and sell it today you would lose (14.00) from holding Dunham High Yield or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham High Yield vs. Advantage Portfolio Class
Performance |
| Timeline |
| Dunham High Yield |
| Advantage Portfolio Class |
Dunham High and Advantage Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Advantage Portfolio
The main advantage of trading using opposite Dunham High and Advantage Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High position performs unexpectedly, Advantage Portfolio 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 Advantage Portfolio will offset losses from the drop in Advantage Portfolio's long position.| Dunham High vs. Lord Abbett Diversified | Dunham High vs. Wells Fargo Diversified | Dunham High vs. Guidepath Conservative Income | Dunham High vs. Jhancock Diversified Macro |
| Advantage Portfolio vs. Lgm Risk Managed | Advantage Portfolio vs. Lord Abbett Short | Advantage Portfolio vs. Barings High Yield | Advantage Portfolio vs. Dunham High Yield |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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