Correlation Between Us Small and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Us Small 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 Us Small and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Small Cap and Dunham Real Estate, you can compare the effects of market volatilities on Us Small 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 Us Small with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Small and Dunham Real.
Diversification Opportunities for Us Small and Dunham Real
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RLESX and Dunham is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Us Small Cap 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 Us Small 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 Us Small Cap 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 Us Small i.e., Us Small and Dunham Real go up and down completely randomly.
Pair Corralation between Us Small and Dunham Real
Assuming the 90 days horizon Us Small is expected to generate 1.33 times less return on investment than Dunham Real. In addition to that, Us Small is 1.29 times more volatile than Dunham Real Estate. It trades about 0.08 of its total potential returns per unit of risk. Dunham Real Estate is currently generating about 0.14 per unit of volatility. If you would invest 1,274 in Dunham Real Estate on September 3, 2024 and sell it today you would earn a total of 255.00 from holding Dunham Real Estate or generate 20.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Small Cap vs. Dunham Real Estate
Performance |
| Timeline |
| Us Small Cap |
| Dunham Real Estate |
Us Small and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Small and Dunham Real
The main advantage of trading using opposite Us Small and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Small 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.| Us Small vs. Vanguard Small Cap Index | Us Small vs. Vanguard Small Cap Index | Us Small vs. Vanguard Small Cap Index | Us Small vs. Vanguard Small Cap Index |
| Dunham Real vs. Sterling Capital Short | Dunham Real vs. Old Westbury Short Term | Dunham Real vs. Goldman Sachs Short | Dunham Real vs. Jhancock Short Duration |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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