Correlation Between Investec Emerging and Dunham Emerging
Can any of the company-specific risk be diversified away by investing in both Investec Emerging 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 Investec Emerging and Dunham Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investec Emerging Markets and Dunham Emerging Markets, you can compare the effects of market volatilities on Investec Emerging 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 Investec Emerging with a short position of Dunham Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Dunham Emerging.
Diversification Opportunities for Investec Emerging and Dunham Emerging
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Investec and Dunham is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets 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 Investec Emerging 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 Investec Emerging Markets 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 Investec Emerging i.e., Investec Emerging and Dunham Emerging go up and down completely randomly.
Pair Corralation between Investec Emerging and Dunham Emerging
Assuming the 90 days horizon Investec Emerging Markets is expected to under-perform the Dunham Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Investec Emerging Markets is 1.15 times less risky than Dunham Emerging. The mutual fund trades about -0.26 of its potential returns per unit of risk. The Dunham Emerging Markets is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 1,432 in Dunham Emerging Markets on October 9, 2024 and sell it today you would lose (41.00) from holding Dunham Emerging Markets or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Emerging Markets vs. Dunham Emerging Markets
Performance |
| Timeline |
| Investec Emerging Markets |
| Dunham Emerging Markets |
Investec Emerging and Dunham Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Dunham Emerging
The main advantage of trading using opposite Investec Emerging and Dunham Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging 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.| Investec Emerging vs. Large Cap Growth Profund | Investec Emerging vs. Tax Managed Large Cap | Investec Emerging vs. Transamerica Large Cap | Investec Emerging vs. Guidemark Large Cap |
| Dunham Emerging vs. Dunham Dynamic Macro | Dunham Emerging vs. Dunham Porategovernment Bond | Dunham Emerging vs. Dunham Focused Large | Dunham Emerging vs. Dunham International Opportunity |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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