Correlation Between Realty Income and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Realty Income 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 Realty Income and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realty Income and Dunham Real Estate, you can compare the effects of market volatilities on Realty Income 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 Realty Income with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realty Income and Dunham Real.
Diversification Opportunities for Realty Income and Dunham Real
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Realty and Dunham is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Realty Income 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 Realty Income 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 Realty Income 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 Realty Income i.e., Realty Income and Dunham Real go up and down completely randomly.
Pair Corralation between Realty Income and Dunham Real
Taking into account the 90-day investment horizon Realty Income is expected to generate 1.01 times more return on investment than Dunham Real. However, Realty Income is 1.01 times more volatile than Dunham Real Estate. It trades about 0.15 of its potential returns per unit of risk. Dunham Real Estate is currently generating about 0.01 per unit of risk. If you would invest 5,573 in Realty Income on November 28, 2024 and sell it today you would earn a total of 158.00 from holding Realty Income or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Realty Income vs. Dunham Real Estate
Performance |
| Timeline |
| Realty Income |
| Dunham Real Estate |
Realty Income and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Realty Income and Dunham Real
The main advantage of trading using opposite Realty Income and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realty Income 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.| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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