Correlation Between Dunham Small and Ab Discovery
Can any of the company-specific risk be diversified away by investing in both Dunham Small and Ab Discovery 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 Small and Ab Discovery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Small Cap and Ab Discovery Value, you can compare the effects of market volatilities on Dunham Small and Ab Discovery 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 Small with a short position of Ab Discovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Small and Ab Discovery.
Diversification Opportunities for Dunham Small and Ab Discovery
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dunham and ABYSX is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Small Cap and Ab Discovery Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Discovery Value and Dunham Small 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 Small Cap are associated (or correlated) with Ab Discovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Discovery Value has no effect on the direction of Dunham Small i.e., Dunham Small and Ab Discovery go up and down completely randomly.
Pair Corralation between Dunham Small and Ab Discovery
Assuming the 90 days horizon Dunham Small Cap is expected to generate 1.01 times more return on investment than Ab Discovery. However, Dunham Small is 1.01 times more volatile than Ab Discovery Value. It trades about 0.35 of its potential returns per unit of risk. Ab Discovery Value is currently generating about 0.34 per unit of risk. If you would invest 1,654 in Dunham Small Cap on September 1, 2024 and sell it today you would earn a total of 166.00 from holding Dunham Small Cap or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Small Cap vs. Ab Discovery Value
Performance |
| Timeline |
| Dunham Small Cap |
| Ab Discovery Value |
Dunham Small and Ab Discovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Small and Ab Discovery
The main advantage of trading using opposite Dunham Small and Ab Discovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Small position performs unexpectedly, Ab Discovery 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 Ab Discovery will offset losses from the drop in Ab Discovery's long position.| Dunham Small vs. Ab Discovery Value | Dunham Small vs. Mutual Of America | Dunham Small vs. Boston Partners Small | Dunham Small vs. Fpa Queens Road |
| Ab Discovery vs. Ab Global E | Ab Discovery vs. Ab Global E | Ab Discovery vs. Ab Global E | Ab Discovery vs. Ab Minnesota Portfolio |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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