Correlation Between Dunham Real and Global Concentrated
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Global Concentrated 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 Global Concentrated 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 Global Centrated Portfolio, you can compare the effects of market volatilities on Dunham Real and Global Concentrated 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 Global Concentrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Global Concentrated.
Diversification Opportunities for Dunham Real and Global Concentrated
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dunham and Global is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Global Centrated Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Centrated Por 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 Global Concentrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Centrated Por has no effect on the direction of Dunham Real i.e., Dunham Real and Global Concentrated go up and down completely randomly.
Pair Corralation between Dunham Real and Global Concentrated
Assuming the 90 days horizon Dunham Real is expected to generate 2.25 times less return on investment than Global Concentrated. In addition to that, Dunham Real is 1.23 times more volatile than Global Centrated Portfolio. It trades about 0.03 of its total potential returns per unit of risk. Global Centrated Portfolio is currently generating about 0.08 per unit of volatility. If you would invest 1,541 in Global Centrated Portfolio on October 10, 2024 and sell it today you would earn a total of 699.00 from holding Global Centrated Portfolio or generate 45.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dunham Real Estate vs. Global Centrated Portfolio
Performance |
Timeline |
Dunham Real Estate |
Global Centrated Por |
Dunham Real and Global Concentrated Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dunham Real and Global Concentrated
The main advantage of trading using opposite Dunham Real and Global Concentrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Global Concentrated 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 Global Concentrated will offset losses from the drop in Global Concentrated's long position.Dunham Real vs. Federated High Yield | Dunham Real vs. Fidelity Capital Income | Dunham Real vs. Calvert High Yield | Dunham Real vs. Lord Abbett Short |
Global Concentrated vs. Prudential Financial Services | Global Concentrated vs. John Hancock Financial | Global Concentrated vs. 1919 Financial Services | Global Concentrated vs. Mesirow Financial Small |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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