Correlation Between Dunham High and Inflation Linked
Can any of the company-specific risk be diversified away by investing in both Dunham High and Inflation Linked 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 Inflation Linked 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 Inflation Linked Fixed Income, you can compare the effects of market volatilities on Dunham High and Inflation Linked 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 Inflation Linked. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Inflation Linked.
Diversification Opportunities for Dunham High and Inflation Linked
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dunham and Inflation is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Inflation Linked Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Linked Fixed 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 Inflation Linked. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Linked Fixed has no effect on the direction of Dunham High i.e., Dunham High and Inflation Linked go up and down completely randomly.
Pair Corralation between Dunham High and Inflation Linked
Assuming the 90 days horizon Dunham High is expected to generate 1.19 times less return on investment than Inflation Linked. But when comparing it to its historical volatility, Dunham High Yield is 1.33 times less risky than Inflation Linked. It trades about 0.28 of its potential returns per unit of risk. Inflation Linked Fixed Income is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 805.00 in Inflation Linked Fixed Income on November 4, 2024 and sell it today you would earn a total of 10.00 from holding Inflation Linked Fixed Income or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham High Yield vs. Inflation Linked Fixed Income
Performance |
| Timeline |
| Dunham High Yield |
| Inflation Linked Fixed |
Dunham High and Inflation Linked Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Inflation Linked
The main advantage of trading using opposite Dunham High and Inflation Linked positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High position performs unexpectedly, Inflation Linked 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 Inflation Linked will offset losses from the drop in Inflation Linked's long position.| Dunham High vs. Eip Growth And | Dunham High vs. Qs Large Cap | Dunham High vs. Scharf Global Opportunity | Dunham High vs. Small Pany Growth |
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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 Stocks Directory module to find actively traded stocks across global markets.
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