Correlation Between Transamerica High and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Transamerica High and Dunham Real 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 Transamerica High and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica High Yield and Dunham Real Estate, you can compare the effects of market volatilities on Transamerica High and Dunham Real 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 Transamerica High with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica High and Dunham Real.
Diversification Opportunities for Transamerica High and Dunham Real
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Transamerica and Dunham is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica High Yield and Dunham Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Real Estate and Transamerica 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 Transamerica High Yield are associated (or correlated) with Dunham Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Real Estate has no effect on the direction of Transamerica High i.e., Transamerica High and Dunham Real go up and down completely randomly.
Pair Corralation between Transamerica High and Dunham Real
Assuming the 90 days horizon Transamerica High Yield is expected to generate 0.2 times more return on investment than Dunham Real. However, Transamerica High Yield is 4.98 times less risky than Dunham Real. It trades about 0.1 of its potential returns per unit of risk. Dunham Real Estate is currently generating about -0.03 per unit of risk. If you would invest 778.00 in Transamerica High Yield on June 11, 2025 and sell it today you would earn a total of 50.00 from holding Transamerica High Yield or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica High Yield vs. Dunham Real Estate
Performance |
| Timeline |
| Transamerica High Yield |
| Dunham Real Estate |
Transamerica High and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica High and Dunham Real
The main advantage of trading using opposite Transamerica High and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica High position performs unexpectedly, Dunham Real 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 Real will offset losses from the drop in Dunham Real's long position.The idea behind Transamerica High Yield and Dunham Real Estate 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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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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