Correlation Between Dunham Real and Aam Select
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Aam Select 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 Real and Aam Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Real Estate and Aam Select Income, you can compare the effects of market volatilities on Dunham Real and Aam Select 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 Real with a short position of Aam Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Aam Select.
Diversification Opportunities for Dunham Real and Aam Select
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dunham and Aam is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Aam Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aam Select Income and Dunham Real 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 Real Estate are associated (or correlated) with Aam Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aam Select Income has no effect on the direction of Dunham Real i.e., Dunham Real and Aam Select go up and down completely randomly.
Pair Corralation between Dunham Real and Aam Select
Assuming the 90 days horizon Dunham Real Estate is expected to under-perform the Aam Select. In addition to that, Dunham Real is 3.95 times more volatile than Aam Select Income. It trades about -0.21 of its total potential returns per unit of risk. Aam Select Income is currently generating about -0.53 per unit of volatility. If you would invest 932.00 in Aam Select Income on October 10, 2024 and sell it today you would lose (30.00) from holding Aam Select Income or give up 3.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Real Estate vs. Aam Select Income
Performance |
| Timeline |
| Dunham Real Estate |
| Aam Select Income |
Dunham Real and Aam Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and Aam Select
The main advantage of trading using opposite Dunham Real and Aam Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Aam Select 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 Aam Select will offset losses from the drop in Aam Select's long position.| Dunham Real vs. Ab Large Cap | Dunham Real vs. Fidelity Large Cap | Dunham Real vs. Guidemark Large Cap | Dunham Real vs. Qs Large Cap |
| Aam Select vs. Rbc Microcap Value | Aam Select vs. Crafword Dividend Growth | Aam Select vs. Fabxx | Aam Select vs. Kirr Marbach Partners |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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