Correlation Between Real Estate and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Real Estate 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 Real Estate and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Estate Ultrasector and Dunham Real Estate, you can compare the effects of market volatilities on Real Estate 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 Real Estate with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Estate and Dunham Real.
Diversification Opportunities for Real Estate and Dunham Real
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Real and Dunham is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Real Estate Ultrasector 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 Real Estate 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 Real Estate Ultrasector 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 Real Estate i.e., Real Estate and Dunham Real go up and down completely randomly.
Pair Corralation between Real Estate and Dunham Real
Assuming the 90 days horizon Real Estate Ultrasector is expected to generate 1.68 times more return on investment than Dunham Real. However, Real Estate is 1.68 times more volatile than Dunham Real Estate. It trades about 0.08 of its potential returns per unit of risk. Dunham Real Estate is currently generating about 0.13 per unit of risk. If you would invest 4,028 in Real Estate Ultrasector on October 21, 2024 and sell it today you would earn a total of 92.00 from holding Real Estate Ultrasector or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Real Estate Ultrasector vs. Dunham Real Estate
Performance |
| Timeline |
| Real Estate Ultrasector |
| Dunham Real Estate |
Real Estate and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Estate and Dunham Real
The main advantage of trading using opposite Real Estate and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Estate 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.| Real Estate vs. Fidelity Real Estate | Real Estate vs. Neuberger Berman Real | Real Estate vs. Texton Property | Real Estate vs. Redwood Real Estate |
| Dunham Real vs. Realty Income | Dunham Real vs. Dynex Capital | Dunham Real vs. First Industrial Realty | Dunham Real vs. Healthcare Realty Trust |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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