Correlation Between Dunham High and Fidelity Sai

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

By analyzing existing cross correlation between Dunham High Yield and Fidelity Sai Long Term, you can compare the effects of market volatilities on Dunham High and Fidelity Sai 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 High with a short position of Fidelity Sai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Fidelity Sai.

Diversification Opportunities for Dunham High and Fidelity Sai

0.31

Correlation Coefficient

Dunham High  Fidelity Sai

Weak diversification

The 3 months correlation between Dunham and Fidelity is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Fidelity Sai Long Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Long and Dunham High 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 High Yield are associated (or correlated) with Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Long has no effect on the direction of Dunham High i.e., Dunham High and Fidelity Sai go up and down completely randomly.

Pair Corralation between Dunham High and Fidelity Sai

Assuming the 90 days horizon Dunham High Yield is expected to generate 0.22 times more return on investment than Fidelity Sai. However, Dunham High Yield is 4.55 times less risky than Fidelity Sai. It trades about -0.01 of its potential returns per unit of risk. Fidelity Sai Long Term is currently generating about -0.15 per unit of risk. If you would invest  867.00  in Dunham High Yield on October 10, 2024 and sell it today you would lose (1.00) from holding Dunham High Yield or give up 0.12% of portfolio value over 90 days.

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

Dunham High Yield  vs.  Fidelity Sai Long Term

Dunham High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

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

Fidelity Sai Long

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Sai Long Term has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 High and Fidelity Sai

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

The idea behind Dunham High Yield and Fidelity Sai Long Term 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.