Correlation Between Forum Real and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Forum Real and Dunham Real 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 Forum Real and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forum Real Estate and Dunham Real Estate, you can compare the effects of market volatilities on Forum Real and Dunham Real 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 Forum Real with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Real and Dunham Real.
Diversification Opportunities for Forum Real and Dunham Real
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Forum and Dunham is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Forum Real Estate and Dunham Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Real Estate and Forum Real 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 Forum Real Estate are associated (or correlated) with Dunham Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Real Estate has no effect on the direction of Forum Real i.e., Forum Real and Dunham Real go up and down completely randomly.
Pair Corralation between Forum Real and Dunham Real
Assuming the 90 days horizon Forum Real Estate is expected to generate 0.06 times more return on investment than Dunham Real. However, Forum Real Estate is 15.58 times less risky than Dunham Real. It trades about 0.76 of its potential returns per unit of risk. Dunham Real Estate is currently generating about 0.03 per unit of risk. If you would invest 963.00 in Forum Real Estate on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Forum Real Estate or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Forum Real Estate vs. Dunham Real Estate
Performance |
| Timeline |
| Forum Real Estate |
| Dunham Real Estate |
Forum Real and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Real and Dunham Real
The main advantage of trading using opposite Forum Real and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Real position performs unexpectedly, Dunham Real 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 Real will offset losses from the drop in Dunham Real's long position.| Forum Real vs. Vanguard Total Stock | Forum Real vs. Vanguard 500 Index | Forum Real vs. Vanguard Total Stock | Forum Real vs. Vanguard Total Stock |
| Dunham Real vs. Franklin Natural Resources | Dunham Real vs. HUMANA INC | Dunham Real vs. Aquagold International | Dunham Real vs. Barloworld Ltd ADR |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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