Correlation Between Mairs Power and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Mairs Power 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 Mairs Power and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Growth and Dunham Real Estate, you can compare the effects of market volatilities on Mairs Power 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 Mairs Power with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Dunham Real.
Diversification Opportunities for Mairs Power and Dunham Real
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mairs and Dunham is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power 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 Mairs Power 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 Mairs Power 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 Mairs Power i.e., Mairs Power and Dunham Real go up and down completely randomly.
Pair Corralation between Mairs Power and Dunham Real
Assuming the 90 days horizon Mairs Power Growth is expected to generate 0.93 times more return on investment than Dunham Real. However, Mairs Power Growth is 1.08 times less risky than Dunham Real. It trades about 0.1 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 17,352 in Mairs Power Growth on October 25, 2024 and sell it today you would earn a total of 267.00 from holding Mairs Power Growth or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Growth vs. Dunham Real Estate
Performance |
| Timeline |
| Mairs Power Growth |
| Dunham Real Estate |
Mairs Power and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and Dunham Real
The main advantage of trading using opposite Mairs Power and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power 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.| Mairs Power vs. Meridian Trarian Fund | Mairs Power vs. Mairs Power Balanced | Mairs Power vs. Clipper Fund Inc | Mairs Power vs. Meridian Growth Fund |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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