Correlation Between Madison Investors and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Madison Investors 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 Madison Investors and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Madison Investors Fund and Dunham Real Estate, you can compare the effects of market volatilities on Madison Investors 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 Madison Investors with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madison Investors and Dunham Real.
Diversification Opportunities for Madison Investors and Dunham Real
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Madison and Dunham is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Madison Investors Fund 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 Madison Investors 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 Madison Investors Fund 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 Madison Investors i.e., Madison Investors and Dunham Real go up and down completely randomly.
Pair Corralation between Madison Investors and Dunham Real
Assuming the 90 days horizon Madison Investors Fund is expected to under-perform the Dunham Real. But the mutual fund apears to be less risky and, when comparing its historical volatility, Madison Investors Fund is 1.33 times less risky than Dunham Real. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Dunham Real Estate is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,410 in Dunham Real Estate on November 28, 2024 and sell it today you would earn a total of 2.00 from holding Dunham Real Estate or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Madison Investors Fund vs. Dunham Real Estate
Performance |
| Timeline |
| Madison Investors |
| Dunham Real Estate |
Madison Investors and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Madison Investors and Dunham Real
The main advantage of trading using opposite Madison Investors and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madison Investors 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.| Madison Investors vs. Rbc Global Equity | Madison Investors vs. Ab Global Bond | Madison Investors vs. Mirova Global Green | Madison Investors vs. Doubleline Global Bond |
| Dunham Real vs. Aqr Diversified Arbitrage | Dunham Real vs. Guidepath Conservative Income | Dunham Real vs. Massmutual Premier Diversified | Dunham Real vs. Global Diversified Income |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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