Correlation Between American Funds and Dunham Focused
Can any of the company-specific risk be diversified away by investing in both American Funds and Dunham Focused 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 American Funds and Dunham Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds The and Dunham Focused Large, you can compare the effects of market volatilities on American Funds and Dunham Focused 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 American Funds with a short position of Dunham Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Dunham Focused.
Diversification Opportunities for American Funds and Dunham Focused
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Dunham is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Dunham Focused Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Focused Large and American Funds 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 American Funds The are associated (or correlated) with Dunham Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Focused Large has no effect on the direction of American Funds i.e., American Funds and Dunham Focused go up and down completely randomly.
Pair Corralation between American Funds and Dunham Focused
Assuming the 90 days horizon American Funds The is expected to generate 0.96 times more return on investment than Dunham Focused. However, American Funds The is 1.05 times less risky than Dunham Focused. It trades about 0.1 of its potential returns per unit of risk. Dunham Focused Large is currently generating about 0.09 per unit of risk. If you would invest 5,488 in American Funds The on September 4, 2024 and sell it today you would earn a total of 2,755 from holding American Funds The or generate 50.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
American Funds The vs. Dunham Focused Large
Performance |
| Timeline |
| American Funds |
| Dunham Focused Large |
American Funds and Dunham Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Dunham Focused
The main advantage of trading using opposite American Funds and Dunham Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Dunham Focused 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 Focused will offset losses from the drop in Dunham Focused's long position.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| Dunham Focused vs. Commonwealth Global Fund | Dunham Focused vs. Auer Growth Fund | Dunham Focused vs. Semiconductor Ultrasector Profund | Dunham Focused vs. Small Cap Stock |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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