Correlation Between Dunham High and Salient Tactical
Can any of the company-specific risk be diversified away by investing in both Dunham High and Salient Tactical 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 Salient Tactical 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 Salient Tactical Plus, you can compare the effects of market volatilities on Dunham High and Salient Tactical 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 Salient Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Salient Tactical.
Diversification Opportunities for Dunham High and Salient Tactical
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dunham and Salient is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Salient Tactical Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Tactical Plus 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 Salient Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Tactical Plus has no effect on the direction of Dunham High i.e., Dunham High and Salient Tactical go up and down completely randomly.
Pair Corralation between Dunham High and Salient Tactical
Assuming the 90 days horizon Dunham High Yield is expected to generate 0.48 times more return on investment than Salient Tactical. However, Dunham High Yield is 2.08 times less risky than Salient Tactical. It trades about 0.17 of its potential returns per unit of risk. Salient Tactical Plus is currently generating about 0.03 per unit of risk. If you would invest 808.00 in Dunham High Yield on November 3, 2024 and sell it today you would earn a total of 66.00 from holding Dunham High Yield or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham High Yield vs. Salient Tactical Plus
Performance |
| Timeline |
| Dunham High Yield |
| Salient Tactical Plus |
Dunham High and Salient Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Salient Tactical
The main advantage of trading using opposite Dunham High and Salient Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High position performs unexpectedly, Salient Tactical 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 Salient Tactical will offset losses from the drop in Salient Tactical's long position.| Dunham High vs. Mesirow Financial Small | Dunham High vs. Davis Financial Fund | Dunham High vs. Transamerica Financial Life | Dunham High vs. Rmb Mendon Financial |
| Salient Tactical vs. Lebenthal Lisanti Small | Salient Tactical vs. Ab Small Cap | Salient Tactical vs. Ab Small Cap | Salient Tactical vs. Df Dent Small |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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