Correlation Between Lifestyle and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Lifestyle 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 Lifestyle and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifestyle Ii Growth and Dunham Real Estate, you can compare the effects of market volatilities on Lifestyle 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 Lifestyle with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifestyle and Dunham Real.
Diversification Opportunities for Lifestyle and Dunham Real
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lifestyle and Dunham is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lifestyle Ii Growth 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 Lifestyle 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 Lifestyle Ii Growth 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 Lifestyle i.e., Lifestyle and Dunham Real go up and down completely randomly.
Pair Corralation between Lifestyle and Dunham Real
Assuming the 90 days horizon Lifestyle Ii Growth is expected to generate 0.67 times more return on investment than Dunham Real. However, Lifestyle Ii Growth is 1.5 times less risky than Dunham Real. It trades about 0.11 of its potential returns per unit of risk. Dunham Real Estate is currently generating about -0.02 per unit of risk. If you would invest 1,284 in Lifestyle Ii Growth on October 25, 2024 and sell it today you would earn a total of 16.00 from holding Lifestyle Ii Growth or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifestyle Ii Growth vs. Dunham Real Estate
Performance |
| Timeline |
| Lifestyle Ii Growth |
| Dunham Real Estate |
Lifestyle and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifestyle and Dunham Real
The main advantage of trading using opposite Lifestyle and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifestyle 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.| Lifestyle vs. Advent Claymore Convertible | Lifestyle vs. Absolute Convertible Arbitrage | Lifestyle vs. Columbia Convertible Securities | Lifestyle vs. Rationalpier 88 Convertible |
| Dunham Real vs. Metropolitan West Porate | Dunham Real vs. Morningstar Defensive Bond | Dunham Real vs. Barings High Yield | Dunham Real vs. Siit High Yield |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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