Correlation Between All Asset and Dunham Dynamic
Can any of the company-specific risk be diversified away by investing in both All Asset 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 All Asset and Dunham Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between All Asset Fund and Dunham Dynamic Macro, you can compare the effects of market volatilities on All Asset 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 All Asset with a short position of Dunham Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of All Asset and Dunham Dynamic.
Diversification Opportunities for All Asset and Dunham Dynamic
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between All and Dunham is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding All Asset Fund 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 All Asset 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 All Asset Fund 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 All Asset i.e., All Asset and Dunham Dynamic go up and down completely randomly.
Pair Corralation between All Asset and Dunham Dynamic
Assuming the 90 days horizon All Asset Fund is expected to generate 0.48 times more return on investment than Dunham Dynamic. However, All Asset Fund is 2.1 times less risky than Dunham Dynamic. It trades about 0.14 of its potential returns per unit of risk. Dunham Dynamic Macro is currently generating about -0.18 per unit of risk. If you would invest 1,079 in All Asset Fund on October 24, 2024 and sell it today you would earn a total of 9.00 from holding All Asset Fund or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
All Asset Fund vs. Dunham Dynamic Macro
Performance |
| Timeline |
| All Asset Fund |
| Dunham Dynamic Macro |
All Asset and Dunham Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with All Asset and Dunham Dynamic
The main advantage of trading using opposite All Asset and Dunham Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All Asset 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.| All Asset vs. Red Oak Technology | All Asset vs. Invesco Technology Fund | All Asset vs. Fidelity Advisor Technology | All Asset vs. Science Technology Fund |
| Dunham Dynamic vs. Qs Large Cap | Dunham Dynamic vs. Dodge Cox Stock | Dunham Dynamic vs. Qs Large Cap | Dunham Dynamic vs. Fidelity Large Cap |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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