Correlation Between Dunham Real and Columbia Large

Can any of the company-specific risk be diversified away by investing in both Dunham Real and Columbia Large 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 Columbia Large 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 Columbia Large Cap, you can compare the effects of market volatilities on Dunham Real and Columbia Large 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 Columbia Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Columbia Large.

Diversification Opportunities for Dunham Real and Columbia Large

-0.47

Correlation Coefficient

Dunham Real  Columbia Large

Very good diversification

The 3 months correlation between Dunham and Columbia is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Columbia Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Large Cap 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 Columbia Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Large Cap has no effect on the direction of Dunham Real i.e., Dunham Real and Columbia Large go up and down completely randomly.

Pair Corralation between Dunham Real and Columbia Large

Assuming the 90 days horizon Dunham Real Estate is expected to under-perform the Columbia Large. In addition to that, Dunham Real is 1.41 times more volatile than Columbia Large Cap. It trades about -0.1 of its total potential returns per unit of risk. Columbia Large Cap is currently generating about 0.16 per unit of volatility. If you would invest  2,853  in Columbia Large Cap on September 27, 2024 and sell it today you would earn a total of  134.00  from holding Columbia Large Cap or generate 4.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	68.25%
Values	Daily Returns

Dunham Real Estate  vs.  Columbia Large Cap

Dunham Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dunham Real Estate 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.

Columbia Large Cap

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Columbia Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak technical and fundamental indicators, Columbia Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dunham Real and Columbia Large

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

The idea behind Dunham Real Estate and Columbia Large Cap 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.