Correlation Between Dunham Large and Voya Bond
Can any of the company-specific risk be diversified away by investing in both Dunham Large and Voya Bond 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 Large and Voya Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Large Cap and Voya Bond Index, you can compare the effects of market volatilities on Dunham Large and Voya Bond 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 Large with a short position of Voya Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and Voya Bond.
Diversification Opportunities for Dunham Large and Voya Bond
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dunham and Voya is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Voya Bond Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Bond Index and Dunham Large 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 Large Cap are associated (or correlated) with Voya Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Bond Index has no effect on the direction of Dunham Large i.e., Dunham Large and Voya Bond go up and down completely randomly.
Pair Corralation between Dunham Large and Voya Bond
Assuming the 90 days horizon Dunham Large Cap is expected to generate 1.96 times more return on investment than Voya Bond. However, Dunham Large is 1.96 times more volatile than Voya Bond Index. It trades about 0.08 of its potential returns per unit of risk. Voya Bond Index is currently generating about -0.16 per unit of risk. If you would invest 2,005 in Dunham Large Cap on September 15, 2024 and sell it today you would earn a total of 57.00 from holding Dunham Large Cap or generate 2.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dunham Large Cap vs. Voya Bond Index
Performance |
Timeline |
Dunham Large Cap |
Voya Bond Index |
Dunham Large and Voya Bond Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dunham Large and Voya Bond
The main advantage of trading using opposite Dunham Large and Voya Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large position performs unexpectedly, Voya Bond 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 Voya Bond will offset losses from the drop in Voya Bond's long position.Dunham Large vs. Dunham Dynamic Macro | Dunham Large vs. Dunham Appreciation Income | Dunham Large vs. Dunham Porategovernment Bond | Dunham Large vs. Dunham Small Cap |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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