Correlation Between Europac Gold and Dunham High

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Can any of the company-specific risk be diversified away by investing in both Europac Gold and Dunham High 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 Europac Gold and Dunham High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europac Gold Fund and Dunham High Yield, you can compare the effects of market volatilities on Europac Gold and Dunham High 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 Europac Gold with a short position of Dunham High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and Dunham High.

Diversification Opportunities for Europac Gold and Dunham High

-0.13
  Correlation Coefficient

Good diversification

The 3 months correlation between Europac and Dunham is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund and Dunham High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham High Yield and Europac Gold 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 Europac Gold Fund are associated (or correlated) with Dunham High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham High Yield has no effect on the direction of Europac Gold i.e., Europac Gold and Dunham High go up and down completely randomly.

Pair Corralation between Europac Gold and Dunham High

Assuming the 90 days horizon Europac Gold is expected to generate 1.34 times less return on investment than Dunham High. In addition to that, Europac Gold is 6.79 times more volatile than Dunham High Yield. It trades about 0.01 of its total potential returns per unit of risk. Dunham High Yield is currently generating about 0.13 per unit of volatility. If you would invest  733.00  in Dunham High Yield on October 11, 2024 and sell it today you would earn a total of  132.00  from holding Dunham High Yield or generate 18.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Europac Gold Fund  vs.  Dunham High Yield

 Performance 
       Timeline  
Europac Gold 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Europac Gold Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
Dunham High Yield 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Dunham High Yield are ranked lower than 1 (%) 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.

Europac Gold and Dunham High Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Europac Gold and Dunham High

The main advantage of trading using opposite Europac Gold and Dunham High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europac Gold position performs unexpectedly, Dunham High 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 Dunham High will offset losses from the drop in Dunham High's long position.
The idea behind Europac Gold Fund and Dunham High Yield 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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