Correlation Between Dividend Growth and Dundee
Can any of the company-specific risk be diversified away by investing in both Dividend Growth and Dundee 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 Dividend Growth and Dundee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dividend Growth Split and Dundee, you can compare the effects of market volatilities on Dividend Growth and Dundee 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 Dividend Growth with a short position of Dundee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dividend Growth and Dundee.
Diversification Opportunities for Dividend Growth and Dundee
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dividend and Dundee is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dividend Growth Split and Dundee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dundee and Dividend 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 Dividend Growth Split are associated (or correlated) with Dundee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dundee has no effect on the direction of Dividend Growth i.e., Dividend Growth and Dundee go up and down completely randomly.
Pair Corralation between Dividend Growth and Dundee
Assuming the 90 days trading horizon Dividend Growth is expected to generate 15.85 times less return on investment than Dundee. But when comparing it to its historical volatility, Dividend Growth Split is 4.33 times less risky than Dundee. It trades about 0.06 of its potential returns per unit of risk. Dundee is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Dundee on January 25, 2024 and sell it today you would earn a total of 29.00 from holding Dundee or generate 29.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dividend Growth Split vs. Dundee
Performance |
| Timeline |
| Dividend Growth Split |
| Dundee |
Dividend Growth and Dundee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dividend Growth and Dundee
The main advantage of trading using opposite Dividend Growth and Dundee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dividend Growth position performs unexpectedly, Dundee 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 Dundee will offset losses from the drop in Dundee's long position.| Dividend Growth vs. ECN Capital Corp | Dividend Growth vs. Element Fleet Management | Dividend Growth vs. Martinrea International | Dividend Growth vs. Mullen Group |
| Dundee vs. AGF Management Limited | Dundee vs. Dorel Industries | Dundee vs. Dream Unlimited Corp | Dundee vs. Dundee Precious Metals |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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