Correlation Between Blkrk Lc and Dunham Monthly

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

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

Diversification Opportunities for Blkrk Lc and Dunham Monthly

0.34

Correlation Coefficient

Blkrk Lc  Dunham Monthly

Weak diversification

The 3 months correlation between Blkrk and Dunham is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Blkrk Lc Cr 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 Blkrk Lc 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 Blkrk Lc Cr 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 Blkrk Lc i.e., Blkrk Lc and Dunham Monthly go up and down completely randomly.

Pair Corralation between Blkrk Lc and Dunham Monthly

Assuming the 90 days horizon Blkrk Lc Cr is expected to under-perform the Dunham Monthly. But the mutual fund apears to be less risky and, when comparing its historical volatility, Blkrk Lc Cr is 1.24 times less risky than Dunham Monthly. The mutual fund trades about -0.19 of its potential returns per unit of risk. The Dunham Monthly Distribution is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  2,904  in Dunham Monthly Distribution on January 20, 2024 and sell it today you would lose (7.00) from holding Dunham Monthly Distribution or give up 0.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Blkrk Lc Cr  vs.  Dunham Monthly Distribution

Blkrk Lc Cr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blkrk Lc Cr has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Blkrk Lc 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

0 of 100

Very Weak

Over the last 90 days Dunham Monthly Distribution has generated negative risk-adjusted returns adding no value to fund investors. 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 Blkrk Lc and Dunham Monthly

The main advantage of trading using opposite Blkrk Lc and Dunham Monthly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blkrk Lc 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 Blkrk Lc Cr 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.