Correlation Between Guidemark Large and Dunham Large
Can any of the company-specific risk be diversified away by investing in both Guidemark Large and Dunham Large 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 Guidemark Large and Dunham Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidemark Large Cap and Dunham Large Cap, you can compare the effects of market volatilities on Guidemark Large and Dunham Large 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 Guidemark Large with a short position of Dunham Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Large and Dunham Large.
Diversification Opportunities for Guidemark Large and Dunham Large
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guidemark and Dunham is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and Dunham Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Large Cap and Guidemark 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 Guidemark Large Cap are associated (or correlated) with Dunham Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Large Cap has no effect on the direction of Guidemark Large i.e., Guidemark Large and Dunham Large go up and down completely randomly.
Pair Corralation between Guidemark Large and Dunham Large
Assuming the 90 days horizon Guidemark Large is expected to generate 3.18 times less return on investment than Dunham Large. In addition to that, Guidemark Large is 1.4 times more volatile than Dunham Large Cap. It trades about 0.03 of its total potential returns per unit of risk. Dunham Large Cap is currently generating about 0.15 per unit of volatility. If you would invest 1,882 in Dunham Large Cap on September 5, 2024 and sell it today you would earn a total of 242.00 from holding Dunham Large Cap or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Guidemark Large Cap vs. Dunham Large Cap
Performance |
| Timeline |
| Guidemark Large Cap |
| Dunham Large Cap |
Guidemark Large and Dunham Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidemark Large and Dunham Large
The main advantage of trading using opposite Guidemark Large and Dunham Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark Large position performs unexpectedly, Dunham Large 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 Large will offset losses from the drop in Dunham Large's long position.| Guidemark Large vs. Dunham Large Cap | Guidemark Large vs. Transamerica Large Cap | Guidemark Large vs. American Mutual Fund | Guidemark Large vs. Avantis Large Cap |
| Dunham Large vs. Glg Intl Small | Dunham Large vs. Tax Managed Mid Small | Dunham Large vs. Small Pany Growth | Dunham Large vs. Us Small 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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