Correlation Between Sp Midcap and Dunham Emerging
Can any of the company-specific risk be diversified away by investing in both Sp Midcap and Dunham Emerging 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 Sp Midcap and Dunham Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Midcap Index and Dunham Emerging Markets, you can compare the effects of market volatilities on Sp Midcap and Dunham Emerging 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 Sp Midcap with a short position of Dunham Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Midcap and Dunham Emerging.
Diversification Opportunities for Sp Midcap and Dunham Emerging
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SPMIX and Dunham is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sp Midcap Index and Dunham Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Emerging Markets and Sp Midcap 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 Sp Midcap Index are associated (or correlated) with Dunham Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Emerging Markets has no effect on the direction of Sp Midcap i.e., Sp Midcap and Dunham Emerging go up and down completely randomly.
Pair Corralation between Sp Midcap and Dunham Emerging
Assuming the 90 days horizon Sp Midcap Index is expected to generate 1.2 times more return on investment than Dunham Emerging. However, Sp Midcap is 1.2 times more volatile than Dunham Emerging Markets. It trades about 0.02 of its potential returns per unit of risk. Dunham Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 2,496 in Sp Midcap Index on October 25, 2024 and sell it today you would earn a total of 192.00 from holding Sp Midcap Index or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sp Midcap Index vs. Dunham Emerging Markets
Performance |
| Timeline |
| Sp Midcap Index |
| Dunham Emerging Markets |
Sp Midcap and Dunham Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp Midcap and Dunham Emerging
The main advantage of trading using opposite Sp Midcap and Dunham Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Midcap position performs unexpectedly, Dunham Emerging 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 Emerging will offset losses from the drop in Dunham Emerging's long position.| Sp Midcap vs. Doubleline Core Fixed | Sp Midcap vs. Artisan Select Equity | Sp Midcap vs. Enhanced Fixed Income | Sp Midcap vs. Small Cap Equity |
| Dunham Emerging vs. Blackrock Science Technology | Dunham Emerging vs. Columbia Global Technology | Dunham Emerging vs. Global Technology Portfolio | Dunham Emerging vs. Vanguard Information Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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