Correlation Between Dunham High and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Dunham High and Catalyst/millburn 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 Catalyst/millburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Dunham High and Catalyst/millburn 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 Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Catalyst/millburn.
Diversification Opportunities for Dunham High and Catalyst/millburn
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dunham and Catalyst/millburn is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalyst/millburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Dunham High i.e., Dunham High and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Dunham High and Catalyst/millburn
Assuming the 90 days horizon Dunham High Yield is expected to generate 0.36 times more return on investment than Catalyst/millburn. However, Dunham High Yield is 2.78 times less risky than Catalyst/millburn. It trades about -0.26 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about -0.13 per unit of risk. If you would invest 879.00 in Dunham High Yield on October 9, 2024 and sell it today you would lose (12.00) from holding Dunham High Yield or give up 1.37% 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. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Dunham High Yield |
| Catalystmillburn Hedge |
Dunham High and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Catalyst/millburn
The main advantage of trading using opposite Dunham High and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High position performs unexpectedly, Catalyst/millburn 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 Catalyst/millburn will offset losses from the drop in Catalyst/millburn's long position.| Dunham High vs. Prudential Government Money | Dunham High vs. Cref Money Market | Dunham High vs. Ab Government Exchange | Dunham High vs. Principal Fds Money |
| Catalyst/millburn vs. College Retirement Equities | Catalyst/millburn vs. Wealthbuilder Moderate Balanced | Catalyst/millburn vs. Qs Moderate Growth | Catalyst/millburn vs. Transamerica Cleartrack Retirement |
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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