Correlation Between Aggressive Growth and Dunham Monthly

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

By analyzing existing cross correlation between Aggressive Growth Portfolio and Dunham Monthly Distribution, you can compare the effects of market volatilities on Aggressive Growth and Dunham Monthly 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 Aggressive Growth with a short position of Dunham Monthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aggressive Growth and Dunham Monthly.

Diversification Opportunities for Aggressive Growth and Dunham Monthly

0.7

Correlation Coefficient

Aggressive Growth  Dunham Monthly

Poor diversification

The 3 months correlation between Aggressive and Dunham is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Portfolio and Dunham Monthly Distribution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Monthly Distr and Aggressive Growth 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 Aggressive Growth Portfolio are associated (or correlated) with Dunham Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Monthly Distr has no effect on the direction of Aggressive Growth i.e., Aggressive Growth and Dunham Monthly go up and down completely randomly.

Pair Corralation between Aggressive Growth and Dunham Monthly

Assuming the 90 days horizon Aggressive Growth Portfolio is expected to under-perform the Dunham Monthly. In addition to that, Aggressive Growth is 6.37 times more volatile than Dunham Monthly Distribution. It trades about -0.19 of its total potential returns per unit of risk. Dunham Monthly Distribution is currently generating about -0.02 per unit of volatility. If you would invest  2,892  in Dunham Monthly Distribution on October 3, 2024 and sell it today you would lose (3.00) from holding Dunham Monthly Distribution or give up 0.1% of portfolio value over 90 days.

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

Aggressive Growth Portfolio  vs.  Dunham Monthly Distribution

Aggressive Growth

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aggressive Growth Portfolio are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Aggressive Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dunham Monthly Distr

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Monthly Distribution are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Dunham Monthly is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aggressive Growth and Dunham Monthly

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

The idea behind Aggressive Growth Portfolio and Dunham Monthly Distribution 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..