Correlation Between Eic Value and Dunham Corporate/govern
Can any of the company-specific risk be diversified away by investing in both Eic Value and Dunham Corporate/govern 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 Eic Value and Dunham Corporate/govern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eic Value Fund and Dunham Porategovernment Bond, you can compare the effects of market volatilities on Eic Value and Dunham Corporate/govern 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 Eic Value with a short position of Dunham Corporate/govern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Dunham Corporate/govern.
Diversification Opportunities for Eic Value and Dunham Corporate/govern
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eic and Dunham is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Dunham Porategovernment Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Porategovernment and Eic Value 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 Eic Value Fund are associated (or correlated) with Dunham Corporate/govern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Porategovernment has no effect on the direction of Eic Value i.e., Eic Value and Dunham Corporate/govern go up and down completely randomly.
Pair Corralation between Eic Value and Dunham Corporate/govern
Assuming the 90 days horizon Eic Value Fund is expected to under-perform the Dunham Corporate/govern. In addition to that, Eic Value is 2.46 times more volatile than Dunham Porategovernment Bond. It trades about -0.11 of its total potential returns per unit of risk. Dunham Porategovernment Bond is currently generating about -0.15 per unit of volatility. If you would invest 1,254 in Dunham Porategovernment Bond on October 11, 2024 and sell it today you would lose (20.00) from holding Dunham Porategovernment Bond or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eic Value Fund vs. Dunham Porategovernment Bond
Performance |
| Timeline |
| Eic Value Fund |
| Dunham Porategovernment |
Eic Value and Dunham Corporate/govern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eic Value and Dunham Corporate/govern
The main advantage of trading using opposite Eic Value and Dunham Corporate/govern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Dunham Corporate/govern 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 Corporate/govern will offset losses from the drop in Dunham Corporate/govern's long position.| Eic Value vs. Davis Financial Fund | Eic Value vs. Financial Industries Fund | Eic Value vs. Gabelli Global Financial | Eic Value vs. Goldman Sachs Financial |
| Dunham Corporate/govern vs. Pace Large Value | Dunham Corporate/govern vs. Dodge Cox Stock | Dunham Corporate/govern vs. Qs Large Cap | Dunham Corporate/govern vs. M Large Cap |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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