Correlation Between Dunham Corporate/govern and Conquer Risk

Can any of the company-specific risk be diversified away by investing in both Dunham Corporate/govern and Conquer Risk 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 Conquer Risk 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 Conquer Risk Managed, you can compare the effects of market volatilities on Dunham Corporate/govern and Conquer Risk 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 Conquer Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Corporate/govern and Conquer Risk.

Diversification Opportunities for Dunham Corporate/govern and Conquer Risk

0.57

Correlation Coefficient

Dunham Corporate/govern  Conquer Risk

Very weak diversification

The 3 months correlation between DUNHAM and Conquer is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Conquer Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conquer Risk Managed 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 Conquer Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conquer Risk Managed has no effect on the direction of Dunham Corporate/govern i.e., Dunham Corporate/govern and Conquer Risk go up and down completely randomly.

Pair Corralation between Dunham Corporate/govern and Conquer Risk

Assuming the 90 days horizon Dunham Porategovernment Bond is expected to under-perform the Conquer Risk. In addition to that, Dunham Corporate/govern is 1.31 times more volatile than Conquer Risk Managed. It trades about -0.02 of its total potential returns per unit of risk. Conquer Risk Managed is currently generating about 0.09 per unit of volatility. If you would invest  998.00  in Conquer Risk Managed on October 23, 2024 and sell it today you would earn a total of  11.00  from holding Conquer Risk Managed or generate 1.1% return on investment over 90 days.

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

Dunham Porategovernment Bond  vs.  Conquer Risk Managed

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.

Conquer Risk Managed

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Conquer Risk Managed are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Conquer Risk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dunham Corporate/govern and Conquer Risk

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

The idea behind Dunham Porategovernment Bond and Conquer Risk Managed 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..