Correlation Between Wells Fargo and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Wells Fargo 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 Wells Fargo and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wells Fargo Strategic and Dunham Real Estate, you can compare the effects of market volatilities on Wells Fargo 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 Wells Fargo with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Dunham Real.
Diversification Opportunities for Wells Fargo and Dunham Real
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wells and Dunham is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Strategic 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 Wells Fargo 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 Wells Fargo Strategic 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 Wells Fargo i.e., Wells Fargo and Dunham Real go up and down completely randomly.
Pair Corralation between Wells Fargo and Dunham Real
Assuming the 90 days horizon Wells Fargo is expected to generate 2.12 times less return on investment than Dunham Real. But when comparing it to its historical volatility, Wells Fargo Strategic is 4.78 times less risky than Dunham Real. It trades about 0.15 of its potential returns per unit of risk. Dunham Real Estate is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,182 in Dunham Real Estate on September 12, 2024 and sell it today you would earn a total of 315.00 from holding Dunham Real Estate or generate 26.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wells Fargo Strategic vs. Dunham Real Estate
Performance |
| Timeline |
| Wells Fargo Strategic |
| Dunham Real Estate |
Wells Fargo and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and Dunham Real
The main advantage of trading using opposite Wells Fargo and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo 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.| Wells Fargo vs. John Hancock Financial | Wells Fargo vs. Mesirow Financial Small | Wells Fargo vs. Angel Oak Financial | Wells Fargo vs. Prudential Jennison Financial |
| Dunham Real vs. Oppenheimer Gold Special | Dunham Real vs. Gabelli Gold Fund | Dunham Real vs. Goldman Sachs Clean | Dunham Real vs. Vy Goldman Sachs |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |