Correlation Between Dunham Emerging and Federated Emerging
Can any of the company-specific risk be diversified away by investing in both Dunham Emerging and Federated Emerging 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 Emerging and Federated Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Emerging Markets and Federated Emerging Market, you can compare the effects of market volatilities on Dunham Emerging and Federated Emerging 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 Emerging with a short position of Federated Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Emerging and Federated Emerging.
Diversification Opportunities for Dunham Emerging and Federated Emerging
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dunham and Federated is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Emerging Markets and Federated Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Emerging Market and Dunham Emerging 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 Emerging Markets are associated (or correlated) with Federated Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Emerging Market has no effect on the direction of Dunham Emerging i.e., Dunham Emerging and Federated Emerging go up and down completely randomly.
Pair Corralation between Dunham Emerging and Federated Emerging
Assuming the 90 days horizon Dunham Emerging Markets is expected to generate 4.68 times more return on investment than Federated Emerging. However, Dunham Emerging is 4.68 times more volatile than Federated Emerging Market. It trades about 0.13 of its potential returns per unit of risk. Federated Emerging Market is currently generating about 0.33 per unit of risk. If you would invest 1,603 in Dunham Emerging Markets on July 23, 2025 and sell it today you would earn a total of 137.00 from holding Dunham Emerging Markets or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Dunham Emerging Markets vs. Federated Emerging Market
Performance |
| Timeline |
| Dunham Emerging Markets |
| Federated Emerging Market |
Dunham Emerging and Federated Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Emerging and Federated Emerging
The main advantage of trading using opposite Dunham Emerging and Federated Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Emerging position performs unexpectedly, Federated Emerging 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 Federated Emerging will offset losses from the drop in Federated Emerging's long position.| Dunham Emerging vs. Aig Government Money | Dunham Emerging vs. Morgan Stanley Government | Dunham Emerging vs. Ridgeworth Seix Government | Dunham Emerging vs. Federated Government Income |
| Federated Emerging vs. Jhancock Short Duration | Federated Emerging vs. Short Intermediate Bond Fund | Federated Emerging vs. Calvert Short Duration | Federated Emerging vs. American Funds Tax Exempt |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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