Correlation Between Fidelity Large and Dunham Dynamic
Can any of the company-specific risk be diversified away by investing in both Fidelity Large and Dunham Dynamic 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 Fidelity Large and Dunham Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Large Cap and Dunham Dynamic Macro, you can compare the effects of market volatilities on Fidelity Large and Dunham Dynamic 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 Fidelity Large with a short position of Dunham Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Large and Dunham Dynamic.
Diversification Opportunities for Fidelity Large and Dunham Dynamic
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and Dunham is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Large Cap and Dunham Dynamic Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Dynamic Macro and Fidelity Large 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 Fidelity Large Cap are associated (or correlated) with Dunham Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Dynamic Macro has no effect on the direction of Fidelity Large i.e., Fidelity Large and Dunham Dynamic go up and down completely randomly.
Pair Corralation between Fidelity Large and Dunham Dynamic
Assuming the 90 days horizon Fidelity Large Cap is expected to generate 9.15 times more return on investment than Dunham Dynamic. However, Fidelity Large is 9.15 times more volatile than Dunham Dynamic Macro. It trades about 0.2 of its potential returns per unit of risk. Dunham Dynamic Macro is currently generating about 0.26 per unit of risk. If you would invest 1,546 in Fidelity Large Cap on November 3, 2024 and sell it today you would earn a total of 64.00 from holding Fidelity Large Cap or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Large Cap vs. Dunham Dynamic Macro
Performance |
| Timeline |
| Fidelity Large Cap |
| Dunham Dynamic Macro |
Fidelity Large and Dunham Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Large and Dunham Dynamic
The main advantage of trading using opposite Fidelity Large and Dunham Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Large position performs unexpectedly, Dunham Dynamic 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 Dynamic will offset losses from the drop in Dunham Dynamic's long position.| Fidelity Large vs. Angel Oak Financial | Fidelity Large vs. Ab Government Exchange | Fidelity Large vs. Gabelli Global Financial | Fidelity Large vs. Prudential Financial Services |
| Dunham Dynamic vs. Praxis Small Cap | Dunham Dynamic vs. Smallcap Fund Fka | Dunham Dynamic vs. Sp Smallcap 600 | Dunham Dynamic vs. Sp Smallcap 600 |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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