Correlation Between Dunham Corporate/govern and Crm Long/short

Can any of the company-specific risk be diversified away by investing in both Dunham Corporate/govern and Crm Long/short 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 Dunham Corporate/govern and Crm Long/short into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dunham Porategovernment Bond and Crm Longshort Opport, you can compare the effects of market volatilities on Dunham Corporate/govern and Crm Long/short 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 Dunham Corporate/govern with a short position of Crm Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Corporate/govern and Crm Long/short.

Diversification Opportunities for Dunham Corporate/govern and Crm Long/short

-0.42

Correlation Coefficient

Dunham Corporate/govern  Crm Long/short

Very good diversification

The 3 months correlation between Dunham and Crm is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Crm Longshort Opport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crm Longshort Opport and Dunham Corporate/govern 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 Dunham Porategovernment Bond are associated (or correlated) with Crm Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crm Longshort Opport has no effect on the direction of Dunham Corporate/govern i.e., Dunham Corporate/govern and Crm Long/short go up and down completely randomly.

Pair Corralation between Dunham Corporate/govern and Crm Long/short

Assuming the 90 days horizon Dunham Porategovernment Bond is expected to under-perform the Crm Long/short. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dunham Porategovernment Bond is 2.12 times less risky than Crm Long/short. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Crm Longshort Opport is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,328  in Crm Longshort Opport on September 4, 2024 and sell it today you would earn a total of  100.00  from holding Crm Longshort Opport or generate 7.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Dunham Porategovernment Bond  vs.  Crm Longshort Opport

Dunham Porategovernment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dunham Porategovernment Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Dunham Corporate/govern is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Crm Longshort Opport

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Crm Longshort Opport are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Crm Long/short may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dunham Corporate/govern and Crm Long/short

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

The idea behind Dunham Porategovernment Bond and Crm Longshort Opport 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.