Correlation Between Dunham High and Simt Multi-asset

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

Diversification Opportunities for Dunham High and Simt Multi-asset

0.01

Correlation Coefficient

Dunham High  Simt Multi-asset

Significant diversification

The 3 months correlation between Dunham and Simt is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Simt Multi Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset 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 Simt Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Asset has no effect on the direction of Dunham High i.e., Dunham High and Simt Multi-asset go up and down completely randomly.

Pair Corralation between Dunham High and Simt Multi-asset

Assuming the 90 days horizon Dunham High Yield is expected to generate 0.93 times more return on investment than Simt Multi-asset. However, Dunham High Yield is 1.07 times less risky than Simt Multi-asset. It trades about 0.13 of its potential returns per unit of risk. Simt Multi Asset Inflation is currently generating about 0.05 per unit of risk. If you would invest  740.00  in Dunham High Yield on October 24, 2024 and sell it today you would earn a total of  131.00  from holding Dunham High Yield or generate 17.7% return on investment over 90 days.

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

Dunham High Yield  vs.  Simt Multi Asset Inflation

Dunham High Yield

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham High Yield are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. 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.

Simt Multi Asset

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Multi Asset Inflation are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Simt Multi-asset 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 Simt Multi-asset

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

The idea behind Dunham High Yield and Simt Multi Asset Inflation 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.