Correlation Between New Perspective and Dunham Corporate/govern
Can any of the company-specific risk be diversified away by investing in both New Perspective and Dunham Corporate/govern 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 New Perspective and Dunham Corporate/govern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Dunham Porategovernment Bond, you can compare the effects of market volatilities on New Perspective and Dunham Corporate/govern 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 New Perspective with a short position of Dunham Corporate/govern. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Dunham Corporate/govern.
Diversification Opportunities for New Perspective and Dunham Corporate/govern
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Dunham is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Dunham Porategovernment Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Porategovernment and New Perspective 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 New Perspective Fund are associated (or correlated) with Dunham Corporate/govern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Porategovernment has no effect on the direction of New Perspective i.e., New Perspective and Dunham Corporate/govern go up and down completely randomly.
Pair Corralation between New Perspective and Dunham Corporate/govern
Assuming the 90 days horizon New Perspective is expected to generate 4.39 times less return on investment than Dunham Corporate/govern. In addition to that, New Perspective is 2.49 times more volatile than Dunham Porategovernment Bond. It trades about 0.01 of its total potential returns per unit of risk. Dunham Porategovernment Bond is currently generating about 0.11 per unit of volatility. If you would invest 1,254 in Dunham Porategovernment Bond on August 27, 2024 and sell it today you would earn a total of 8.00 from holding Dunham Porategovernment Bond or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Perspective Fund vs. Dunham Porategovernment Bond
Performance |
| Timeline |
| New Perspective |
| Dunham Porategovernment |
New Perspective and Dunham Corporate/govern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Dunham Corporate/govern
The main advantage of trading using opposite New Perspective and Dunham Corporate/govern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Dunham Corporate/govern 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 Corporate/govern will offset losses from the drop in Dunham Corporate/govern's long position.| New Perspective vs. Rbc Microcap Value | New Perspective vs. Western Asset Municipal | New Perspective vs. Volumetric Fund Volumetric | New Perspective vs. Abr 7525 Volatility |
| Dunham Corporate/govern vs. Dunham Dynamic Macro | Dunham Corporate/govern vs. Dunham Appreciation Income | Dunham Corporate/govern vs. Dunham Small Cap | Dunham Corporate/govern 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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