Correlation Between Dunham Porategovernment and Collegeadvantage

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

By analyzing existing cross correlation between Dunham Porategovernment Bond and Collegeadvantage 529 Savings, you can compare the effects of market volatilities on Dunham Porategovernment and Collegeadvantage 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 Porategovernment with a short position of Collegeadvantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Porategovernment and Collegeadvantage.

Diversification Opportunities for Dunham Porategovernment and Collegeadvantage

-0.4

Correlation Coefficient

Dunham Porategovernment  Collegeadvantage

Very good diversification

The 3 months correlation between Dunham and Collegeadvantage is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Collegeadvantage 529 Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collegeadvantage 529 and Dunham Porategovernment 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 Porategovernment Bond are associated (or correlated) with Collegeadvantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collegeadvantage 529 has no effect on the direction of Dunham Porategovernment i.e., Dunham Porategovernment and Collegeadvantage go up and down completely randomly.

Pair Corralation between Dunham Porategovernment and Collegeadvantage

Assuming the 90 days horizon Dunham Porategovernment Bond is expected to under-perform the Collegeadvantage. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dunham Porategovernment Bond is 2.25 times less risky than Collegeadvantage. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Collegeadvantage 529 Savings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,279  in Collegeadvantage 529 Savings on September 20, 2024 and sell it today you would earn a total of  181.00  from holding Collegeadvantage 529 Savings or generate 4.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Dunham Porategovernment Bond  vs.  Collegeadvantage 529 Savings

Dunham Porategovernment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dunham Porategovernment Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Dunham Porategovernment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Collegeadvantage 529

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Collegeadvantage 529 Savings are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Collegeadvantage 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 Porategovernment and Collegeadvantage

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

The idea behind Dunham Porategovernment Bond and Collegeadvantage 529 Savings 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.