Correlation Between Dunham High and Parametric Intl
Can any of the company-specific risk be diversified away by investing in both Dunham High and Parametric Intl 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 High and Parametric Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham High Yield and Parametric Intl Equity, you can compare the effects of market volatilities on Dunham High and Parametric Intl 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 High with a short position of Parametric Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Parametric Intl.
Diversification Opportunities for Dunham High and Parametric Intl
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dunham and Parametric is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Parametric Intl Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parametric Intl Equity and Dunham High 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 High Yield are associated (or correlated) with Parametric Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parametric Intl Equity has no effect on the direction of Dunham High i.e., Dunham High and Parametric Intl go up and down completely randomly.
Pair Corralation between Dunham High and Parametric Intl
Assuming the 90 days horizon Dunham High is expected to generate 1.67 times less return on investment than Parametric Intl. But when comparing it to its historical volatility, Dunham High Yield is 4.56 times less risky than Parametric Intl. It trades about 0.46 of its potential returns per unit of risk. Parametric Intl Equity is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,662 in Parametric Intl Equity on June 7, 2025 and sell it today you would earn a total of 38.00 from holding Parametric Intl Equity or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham High Yield vs. Parametric Intl Equity
Performance |
| Timeline |
| Dunham High Yield |
| Parametric Intl Equity |
Dunham High and Parametric Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Parametric Intl
The main advantage of trading using opposite Dunham High and Parametric Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High position performs unexpectedly, Parametric Intl 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 Parametric Intl will offset losses from the drop in Parametric Intl's long position.| Dunham High vs. Dunham Dynamic Macro | Dunham High vs. Dunham Appreciation Income | Dunham High vs. Dunham Porategovernment Bond | Dunham High vs. Dunham Small Cap |
| Parametric Intl vs. Lord Abbett Diversified | Parametric Intl vs. Fuller Thaler Behavioral | Parametric Intl vs. Aqr Diversified Arbitrage | Parametric Intl vs. Legg Mason Bw |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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