Correlation Between Dunham Real and Pro-blend(r) Extended
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Pro-blend(r) Extended 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 Pro-blend(r) Extended 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 Pro Blend Extended Term, you can compare the effects of market volatilities on Dunham Real and Pro-blend(r) Extended 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 Pro-blend(r) Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Pro-blend(r) Extended.
Diversification Opportunities for Dunham Real and Pro-blend(r) Extended
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dunham and Pro-blend(r) is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Pro Blend Extended Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro-blend(r) Extended 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 Pro-blend(r) Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro-blend(r) Extended has no effect on the direction of Dunham Real i.e., Dunham Real and Pro-blend(r) Extended go up and down completely randomly.
Pair Corralation between Dunham Real and Pro-blend(r) Extended
Assuming the 90 days horizon Dunham Real Estate is expected to under-perform the Pro-blend(r) Extended. In addition to that, Dunham Real is 1.8 times more volatile than Pro Blend Extended Term. It trades about -0.02 of its total potential returns per unit of risk. Pro Blend Extended Term is currently generating about 0.16 per unit of volatility. If you would invest 1,957 in Pro Blend Extended Term on October 25, 2024 and sell it today you would earn a total of 30.00 from holding Pro Blend Extended Term or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Real Estate vs. Pro Blend Extended Term
Performance |
| Timeline |
| Dunham Real Estate |
| Pro-blend(r) Extended |
Dunham Real and Pro-blend(r) Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and Pro-blend(r) Extended
The main advantage of trading using opposite Dunham Real and Pro-blend(r) Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Pro-blend(r) Extended 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 Pro-blend(r) Extended will offset losses from the drop in Pro-blend(r) Extended's long position.| Dunham Real vs. Metropolitan West Porate | Dunham Real vs. Morningstar Defensive Bond | Dunham Real vs. Barings High Yield | Dunham Real vs. Siit High Yield |
| Pro-blend(r) Extended vs. T Rowe Price | Pro-blend(r) Extended vs. T Rowe Price | Pro-blend(r) Extended vs. Small Cap Growth | Pro-blend(r) Extended vs. Mid Cap Growth |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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