Correlation Between Smead Funds and Dunham High
Can any of the company-specific risk be diversified away by investing in both Smead Funds and Dunham High 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 Smead Funds and Dunham High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smead Funds Trust and Dunham High Yield, you can compare the effects of market volatilities on Smead Funds and Dunham High 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 Smead Funds with a short position of Dunham High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smead Funds and Dunham High.
Diversification Opportunities for Smead Funds and Dunham High
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Smead and Dunham is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Smead Funds Trust and Dunham High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham High Yield and Smead Funds 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 Smead Funds Trust are associated (or correlated) with Dunham High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham High Yield has no effect on the direction of Smead Funds i.e., Smead Funds and Dunham High go up and down completely randomly.
Pair Corralation between Smead Funds and Dunham High
Assuming the 90 days horizon Smead Funds Trust is expected to generate 3.85 times more return on investment than Dunham High. However, Smead Funds is 3.85 times more volatile than Dunham High Yield. It trades about 0.4 of its potential returns per unit of risk. Dunham High Yield is currently generating about 0.28 per unit of risk. If you would invest 5,453 in Smead Funds Trust on November 4, 2024 and sell it today you would earn a total of 301.00 from holding Smead Funds Trust or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Smead Funds Trust vs. Dunham High Yield
Performance |
| Timeline |
| Smead Funds Trust |
| Dunham High Yield |
Smead Funds and Dunham High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smead Funds and Dunham High
The main advantage of trading using opposite Smead Funds and Dunham High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smead Funds position performs unexpectedly, Dunham High 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 High will offset losses from the drop in Dunham High's long position.| Smead Funds vs. Calvert Conservative Allocation | Smead Funds vs. Wealthbuilder Conservative Allocation | Smead Funds vs. Voya Solution Conservative | Smead Funds vs. Guidepath Conservative Income |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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