Correlation Between Dunham High and Rbc Bluebay

Can any of the company-specific risk be diversified away by investing in both Dunham High and Rbc Bluebay 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 Rbc Bluebay 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 Rbc Bluebay Global, you can compare the effects of market volatilities on Dunham High and Rbc Bluebay 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 Rbc Bluebay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Rbc Bluebay.

Diversification Opportunities for Dunham High and Rbc Bluebay

0.76

Correlation Coefficient

Dunham High  Rbc Bluebay

Poor diversification

The 3 months correlation between Dunham and Rbc is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Rbc Bluebay Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Bluebay Global 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 Rbc Bluebay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Bluebay Global has no effect on the direction of Dunham High i.e., Dunham High and Rbc Bluebay go up and down completely randomly.

Pair Corralation between Dunham High and Rbc Bluebay

Assuming the 90 days horizon Dunham High is expected to generate 1.03 times less return on investment than Rbc Bluebay. In addition to that, Dunham High is 1.02 times more volatile than Rbc Bluebay Global. It trades about 0.13 of its total potential returns per unit of risk. Rbc Bluebay Global is currently generating about 0.13 per unit of volatility. If you would invest  915.00  in Rbc Bluebay Global on October 9, 2024 and sell it today you would earn a total of  59.00  from holding Rbc Bluebay Global or generate 6.45% return on investment over 90 days.

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

Dunham High Yield  vs.  Rbc Bluebay Global

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.

Rbc Bluebay Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbc Bluebay Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Rbc Bluebay 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 High and Rbc Bluebay

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

The idea behind Dunham High Yield and Rbc Bluebay Global 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.