Correlation Between The Emerging and Dunham Emerging
Can any of the company-specific risk be diversified away by investing in both The Emerging 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 The Emerging and Dunham Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Emerging Markets and Dunham Emerging Markets, you can compare the effects of market volatilities on The Emerging 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 The Emerging with a short position of Dunham Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Emerging and Dunham Emerging.
Diversification Opportunities for The Emerging and Dunham Emerging
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Dunham is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding The Emerging Markets 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 The Emerging 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 The Emerging Markets 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 The Emerging i.e., The Emerging and Dunham Emerging go up and down completely randomly.
Pair Corralation between The Emerging and Dunham Emerging
Assuming the 90 days horizon The Emerging is expected to generate 1.06 times less return on investment than Dunham Emerging. But when comparing it to its historical volatility, The Emerging Markets is 1.04 times less risky than Dunham Emerging. It trades about 0.04 of its potential returns per unit of risk. Dunham Emerging Markets is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,130 in Dunham Emerging Markets on September 3, 2024 and sell it today you would earn a total of 104.00 from holding Dunham Emerging Markets or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Emerging Markets vs. Dunham Emerging Markets
Performance |
| Timeline |
| Emerging Markets |
| Dunham Emerging Markets |
The Emerging and Dunham Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Emerging and Dunham Emerging
The main advantage of trading using opposite The Emerging and Dunham Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Emerging 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.| The Emerging vs. Vanguard Total Stock | The Emerging vs. Vanguard 500 Index | The Emerging vs. Vanguard Total Stock | The Emerging vs. Vanguard Total Stock |
| Dunham Emerging vs. Mondrian Emerging Markets | Dunham Emerging vs. The Emerging Markets | Dunham Emerging vs. Dodge Cox Emerging | Dunham Emerging vs. Ep Emerging Markets |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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