Correlation Between Federated High and Dunham Emerging
Can any of the company-specific risk be diversified away by investing in both Federated High and Dunham Emerging 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 Federated High and Dunham Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated High Yield and Dunham Emerging Markets, you can compare the effects of market volatilities on Federated High and Dunham Emerging 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 Federated High with a short position of Dunham Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated High and Dunham Emerging.
Diversification Opportunities for Federated High and Dunham Emerging
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federated and Dunham is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Federated High Yield and Dunham Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Emerging Markets and Federated High 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 Federated High Yield are associated (or correlated) with Dunham Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Emerging Markets has no effect on the direction of Federated High i.e., Federated High and Dunham Emerging go up and down completely randomly.
Pair Corralation between Federated High and Dunham Emerging
Assuming the 90 days horizon Federated High Yield is expected to generate 0.24 times more return on investment than Dunham Emerging. However, Federated High Yield is 4.15 times less risky than Dunham Emerging. It trades about 0.16 of its potential returns per unit of risk. Dunham Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 586.00 in Federated High Yield on November 4, 2024 and sell it today you would earn a total of 55.00 from holding Federated High Yield or generate 9.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated High Yield vs. Dunham Emerging Markets
Performance |
| Timeline |
| Federated High Yield |
| Dunham Emerging Markets |
Federated High and Dunham Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated High and Dunham Emerging
The main advantage of trading using opposite Federated High and Dunham Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated High position performs unexpectedly, Dunham Emerging 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 Emerging will offset losses from the drop in Dunham Emerging's long position.| Federated High vs. Janus High Yield Fund | Federated High vs. Northeast Investors Trust | Federated High vs. High Yield Fund Investor | Federated High vs. Ab Sustainable Thematic |
| Dunham Emerging vs. Virtus Convertible | Dunham Emerging vs. Advent Claymore Convertible | Dunham Emerging vs. Putnam Convertible Securities | Dunham Emerging vs. Fidelity Sai Convertible |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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