Correlation Between Dunham Real and Monthly Rebalance

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

By analyzing existing cross correlation between Dunham Real Estate and Monthly Rebalance Nasdaq 100, you can compare the effects of market volatilities on Dunham Real and Monthly Rebalance 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 Real with a short position of Monthly Rebalance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Monthly Rebalance.

Diversification Opportunities for Dunham Real and Monthly Rebalance

0.65

Correlation Coefficient

Dunham Real  Monthly Rebalance

Poor diversification

The 3 months correlation between Dunham and Monthly is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Monthly Rebalance Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monthly Rebalance and Dunham Real 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 Real Estate are associated (or correlated) with Monthly Rebalance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monthly Rebalance has no effect on the direction of Dunham Real i.e., Dunham Real and Monthly Rebalance go up and down completely randomly.

Pair Corralation between Dunham Real and Monthly Rebalance

Assuming the 90 days horizon Dunham Real Estate is expected to generate 0.43 times more return on investment than Monthly Rebalance. However, Dunham Real Estate is 2.33 times less risky than Monthly Rebalance. It trades about 0.18 of its potential returns per unit of risk. Monthly Rebalance Nasdaq 100 is currently generating about 0.07 per unit of risk. If you would invest  1,373  in Dunham Real Estate on October 20, 2024 and sell it today you would earn a total of  45.00  from holding Dunham Real Estate or generate 3.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Dunham Real Estate  vs.  Monthly Rebalance Nasdaq 100

Dunham Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Monthly Rebalance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monthly Rebalance Nasdaq 100 has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Dunham Real and Monthly Rebalance

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

The idea behind Dunham Real Estate and Monthly Rebalance Nasdaq 100 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.