Correlation Between Dunham Real and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Growth, you can compare the effects of market volatilities on Dunham Real and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Goldman Sachs.
Diversification Opportunities for Dunham Real and Goldman Sachs
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dunham and Goldman is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Goldman Sachs Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Growth 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Growth has no effect on the direction of Dunham Real i.e., Dunham Real and Goldman Sachs go up and down completely randomly.
Pair Corralation between Dunham Real and Goldman Sachs
Assuming the 90 days horizon Dunham Real is expected to generate 2.37 times less return on investment than Goldman Sachs. In addition to that, Dunham Real is 1.95 times more volatile than Goldman Sachs Growth. It trades about 0.04 of its total potential returns per unit of risk. Goldman Sachs Growth is currently generating about 0.21 per unit of volatility. If you would invest 1,547 in Goldman Sachs Growth on November 3, 2024 and sell it today you would earn a total of 37.00 from holding Goldman Sachs Growth or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dunham Real Estate vs. Goldman Sachs Growth
Performance |
| Timeline |
| Dunham Real Estate |
| Goldman Sachs Growth |
Dunham Real and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and Goldman Sachs
The main advantage of trading using opposite Dunham Real and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Dunham Real vs. Angel Oak Multi Strategy | Dunham Real vs. Siit Emerging Markets | Dunham Real vs. Ashmore Emerging Markets | Dunham Real vs. Artisan Developing World |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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