Correlation Between NYSE Composite and Dunham Dynamic
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Dunham Dynamic 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 NYSE Composite and Dunham Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Dunham Dynamic Macro, you can compare the effects of market volatilities on NYSE Composite and Dunham Dynamic 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 NYSE Composite with a short position of Dunham Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Dunham Dynamic.
Diversification Opportunities for NYSE Composite and Dunham Dynamic
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and Dunham is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Dunham Dynamic Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Dynamic Macro and NYSE Composite 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 NYSE Composite are associated (or correlated) with Dunham Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Dynamic Macro has no effect on the direction of NYSE Composite i.e., NYSE Composite and Dunham Dynamic go up and down completely randomly.
Pair Corralation between NYSE Composite and Dunham Dynamic
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Dunham Dynamic. In addition to that, NYSE Composite is 5.04 times more volatile than Dunham Dynamic Macro. It trades about -0.01 of its total potential returns per unit of risk. Dunham Dynamic Macro is currently generating about 0.1 per unit of volatility. If you would invest 1,201 in Dunham Dynamic Macro on November 29, 2024 and sell it today you would earn a total of 3.00 from holding Dunham Dynamic Macro or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Dunham Dynamic Macro
Performance |
| Timeline |
NYSE Composite and Dunham Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Dunham Dynamic Macro
Pair trading matchups for Dunham Dynamic
Pair Trading with NYSE Composite and Dunham Dynamic
The main advantage of trading using opposite NYSE Composite and Dunham Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Dunham Dynamic 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 Dynamic will offset losses from the drop in Dunham Dynamic's long position.| NYSE Composite vs. Kenon Holdings | NYSE Composite vs. American Electric Power | NYSE Composite vs. Mesa Air Group | NYSE Composite vs. Suburban Propane Partners |
| Dunham Dynamic vs. Siit Ultra Short | Dunham Dynamic vs. Catholic Responsible Investments | Dunham Dynamic vs. Seix Govt Sec | Dunham Dynamic vs. Alpine Ultra Short |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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