Correlation Between Blackrock Alternative and Dunham Monthly

Can any of the company-specific risk be diversified away by investing in both Blackrock Alternative and Dunham Monthly 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 Blackrock Alternative and Dunham Monthly into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blackrock Alternative Capital and Dunham Monthly Distribution, you can compare the effects of market volatilities on Blackrock Alternative and Dunham Monthly 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 Blackrock Alternative with a short position of Dunham Monthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Alternative and Dunham Monthly.

Diversification Opportunities for Blackrock Alternative and Dunham Monthly

-0.05

Correlation Coefficient

Blackrock Alternative  Dunham Monthly

Good diversification

The 3 months correlation between Blackrock and Dunham is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Alternative Capital and Dunham Monthly Distribution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Monthly Distr and Blackrock Alternative 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 Blackrock Alternative Capital are associated (or correlated) with Dunham Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Monthly Distr has no effect on the direction of Blackrock Alternative i.e., Blackrock Alternative and Dunham Monthly go up and down completely randomly.

Pair Corralation between Blackrock Alternative and Dunham Monthly

Assuming the 90 days horizon Blackrock Alternative Capital is expected to under-perform the Dunham Monthly. But the mutual fund apears to be less risky and, when comparing its historical volatility, Blackrock Alternative Capital is 1.2 times less risky than Dunham Monthly. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Dunham Monthly Distribution is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,697  in Dunham Monthly Distribution on October 9, 2024 and sell it today you would earn a total of  15.00  from holding Dunham Monthly Distribution or generate 0.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Blackrock Alternative Capital  vs.  Dunham Monthly Distribution

Blackrock Alternative

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Alternative Capital has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Blackrock Alternative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dunham Monthly Distr

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Monthly Distribution are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Dunham Monthly is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Alternative and Dunham Monthly

The main advantage of trading using opposite Blackrock Alternative and Dunham Monthly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Alternative position performs unexpectedly, Dunham Monthly 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 Monthly will offset losses from the drop in Dunham Monthly's long position.

The idea behind Blackrock Alternative Capital and Dunham Monthly Distribution pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.