Correlation Between Dunham International and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Dunham International and Dunham Real 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 International and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham International Stock and Dunham Real Estate, you can compare the effects of market volatilities on Dunham International and Dunham Real 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 International with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham International and Dunham Real.
Diversification Opportunities for Dunham International and Dunham Real
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dunham and Dunham is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dunham International Stock and Dunham Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Real Estate and Dunham International 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 International Stock are associated (or correlated) with Dunham Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Real Estate has no effect on the direction of Dunham International i.e., Dunham International and Dunham Real go up and down completely randomly.
Pair Corralation between Dunham International and Dunham Real
Assuming the 90 days horizon Dunham International is expected to generate 1.41 times less return on investment than Dunham Real. But when comparing it to its historical volatility, Dunham International Stock is 1.23 times less risky than Dunham Real. It trades about 0.07 of its potential returns per unit of risk. Dunham Real Estate is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,242 in Dunham Real Estate on September 2, 2024 and sell it today you would earn a total of 287.00 from holding Dunham Real Estate or generate 23.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham International Stock vs. Dunham Real Estate
Performance |
| Timeline |
| Dunham International |
| Dunham Real Estate |
Dunham International and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham International and Dunham Real
The main advantage of trading using opposite Dunham International and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham International position performs unexpectedly, Dunham Real 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 Dunham Real will offset losses from the drop in Dunham Real's long position.| Dunham International vs. Dunham Small Cap | Dunham International vs. Dunham Emerging Markets | Dunham International vs. Dunham Real Estate | Dunham International vs. Dunham Small Cap |
| Dunham Real vs. Realty Income | Dunham Real vs. Dynex Capital | Dunham Real vs. First Industrial Realty | Dunham Real vs. Healthcare Realty Trust |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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