Correlation Between Locorr Market and Dunham Emerging
Can any of the company-specific risk be diversified away by investing in both Locorr Market 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 Locorr Market and Dunham Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locorr Market Trend and Dunham Emerging Markets, you can compare the effects of market volatilities on Locorr Market 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 Locorr Market with a short position of Dunham Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locorr Market and Dunham Emerging.
Diversification Opportunities for Locorr Market and Dunham Emerging
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Locorr and DUNHAM is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Locorr Market Trend 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 Locorr Market 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 Locorr Market Trend 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 Locorr Market i.e., Locorr Market and Dunham Emerging go up and down completely randomly.
Pair Corralation between Locorr Market and Dunham Emerging
Assuming the 90 days horizon Locorr Market Trend is expected to generate 0.78 times more return on investment than Dunham Emerging. However, Locorr Market Trend is 1.27 times less risky than Dunham Emerging. It trades about 0.11 of its potential returns per unit of risk. Dunham Emerging Markets is currently generating about -0.06 per unit of risk. If you would invest 1,002 in Locorr Market Trend on October 24, 2024 and sell it today you would earn a total of 42.00 from holding Locorr Market Trend or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Locorr Market Trend vs. Dunham Emerging Markets
Performance |
| Timeline |
| Locorr Market Trend |
| Dunham Emerging Markets |
Locorr Market and Dunham Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locorr Market and Dunham Emerging
The main advantage of trading using opposite Locorr Market and Dunham Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locorr Market 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.| Locorr Market vs. Dreyfusstandish Global Fixed | Locorr Market vs. Rbc Global Equity | Locorr Market vs. Ab Global Bond | Locorr Market vs. Alliancebernstein Global Highome |
| Dunham Emerging vs. Vanguard Emerging Markets | Dunham Emerging vs. Jhancock Diversified Macro | Dunham Emerging vs. Calvert Developed Market | Dunham Emerging vs. Barings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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