Correlation Between Dunham Large and Value Fund
Can any of the company-specific risk be diversified away by investing in both Dunham Large and Value Fund 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 Large and Value Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Large Cap and Value Fund Value, you can compare the effects of market volatilities on Dunham Large and Value Fund 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 Large with a short position of Value Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and Value Fund.
Diversification Opportunities for Dunham Large and Value Fund
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DUNHAM and Value is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Value Fund Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund Value and Dunham Large 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 Large Cap are associated (or correlated) with Value Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund Value has no effect on the direction of Dunham Large i.e., Dunham Large and Value Fund go up and down completely randomly.
Pair Corralation between Dunham Large and Value Fund
Assuming the 90 days horizon Dunham Large Cap is expected to generate 0.79 times more return on investment than Value Fund. However, Dunham Large Cap is 1.27 times less risky than Value Fund. It trades about 0.13 of its potential returns per unit of risk. Value Fund Value is currently generating about 0.08 per unit of risk. If you would invest 1,828 in Dunham Large Cap on September 1, 2024 and sell it today you would earn a total of 308.00 from holding Dunham Large Cap or generate 16.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Large Cap vs. Value Fund Value
Performance |
| Timeline |
| Dunham Large Cap |
| Value Fund Value |
Dunham Large and Value Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Large and Value Fund
The main advantage of trading using opposite Dunham Large and Value Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large position performs unexpectedly, Value Fund 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 Value Fund will offset losses from the drop in Value Fund's long position.| Dunham Large vs. Dunham Appreciation Income | Dunham Large vs. Dunham Dynamic Macro | Dunham Large vs. Dunham Small Cap | Dunham Large vs. Dunham Emerging Markets |
| Value Fund vs. Partners Value Fund | Value Fund vs. Clipper Fund Inc | Value Fund vs. Longleaf Partners Fund | Value Fund vs. Third Avenue Value |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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