Correlation Between Pace Large and Dunham Large
Can any of the company-specific risk be diversified away by investing in both Pace Large and Dunham Large 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 Pace Large and Dunham Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Large Value and Dunham Large Cap, you can compare the effects of market volatilities on Pace Large and Dunham Large 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 Pace Large with a short position of Dunham Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Large and Dunham Large.
Diversification Opportunities for Pace Large and Dunham Large
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pace and DUNHAM is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Pace Large Value and Dunham Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Large Cap and Pace Large 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 Pace Large Value are associated (or correlated) with Dunham Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Large Cap has no effect on the direction of Pace Large i.e., Pace Large and Dunham Large go up and down completely randomly.
Pair Corralation between Pace Large and Dunham Large
Assuming the 90 days horizon Pace Large is expected to generate 1.13 times less return on investment than Dunham Large. But when comparing it to its historical volatility, Pace Large Value is 1.22 times less risky than Dunham Large. It trades about 0.16 of its potential returns per unit of risk. Dunham Large Cap is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,580 in Dunham Large Cap on September 1, 2024 and sell it today you would earn a total of 556.00 from holding Dunham Large Cap or generate 35.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Pace Large Value vs. Dunham Large Cap
Performance |
| Timeline |
| Pace Large Value |
| Dunham Large Cap |
Pace Large and Dunham Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Large and Dunham Large
The main advantage of trading using opposite Pace Large and Dunham Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Large position performs unexpectedly, Dunham Large 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 Large will offset losses from the drop in Dunham Large's long position.| Pace Large vs. Principal Lifetime Hybrid | Pace Large vs. Touchstone Large Cap | Pace Large vs. Tax Managed Large Cap | Pace Large vs. Federated Kaufmann Large |
| Dunham Large vs. Dunham Appreciation Income | Dunham Large vs. Dunham Dynamic Macro | Dunham Large vs. Dunham Small Cap | Dunham Large vs. Dunham Emerging Markets |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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