Correlation Between Intermediate-term and Dunham Large
Can any of the company-specific risk be diversified away by investing in both Intermediate-term and Dunham Large 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 Intermediate-term and Dunham Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Term Tax Free Bond and Dunham Large Cap, you can compare the effects of market volatilities on Intermediate-term and Dunham Large 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 Intermediate-term with a short position of Dunham Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate-term and Dunham Large.
Diversification Opportunities for Intermediate-term and Dunham Large
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intermediate-term and Dunham is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Tax Free Bon and Dunham Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Large Cap and Intermediate-term 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 Intermediate Term Tax Free Bond are associated (or correlated) with Dunham Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Large Cap has no effect on the direction of Intermediate-term i.e., Intermediate-term and Dunham Large go up and down completely randomly.
Pair Corralation between Intermediate-term and Dunham Large
Assuming the 90 days horizon Intermediate-term is expected to generate 4.22 times less return on investment than Dunham Large. But when comparing it to its historical volatility, Intermediate Term Tax Free Bond is 3.68 times less risky than Dunham Large. It trades about 0.07 of its potential returns per unit of risk. Dunham Large Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,632 in Dunham Large Cap on September 3, 2024 and sell it today you would earn a total of 521.00 from holding Dunham Large Cap or generate 31.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Term Tax Free Bon vs. Dunham Large Cap
Performance |
| Timeline |
| Intermediate Term Tax |
| Dunham Large Cap |
Intermediate-term and Dunham Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate-term and Dunham Large
The main advantage of trading using opposite Intermediate-term and Dunham Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate-term position performs unexpectedly, Dunham Large 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 Large will offset losses from the drop in Dunham Large's long position.| Intermediate-term vs. Mesirow Financial Small | Intermediate-term vs. Goldman Sachs Financial | Intermediate-term vs. Royce Global Financial | Intermediate-term vs. Davis Financial Fund |
| Dunham Large vs. Victory High Income | Dunham Large vs. Lind Capital Partners | Dunham Large vs. Intermediate Term Tax Free Bond | Dunham Large vs. Ishares Municipal Bond |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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