Correlation Between Columbia Moderate and Dunham Focused
Can any of the company-specific risk be diversified away by investing in both Columbia Moderate and Dunham Focused 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 Columbia Moderate and Dunham Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Moderate Growth and Dunham Focused Large, you can compare the effects of market volatilities on Columbia Moderate and Dunham Focused 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 Columbia Moderate with a short position of Dunham Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Moderate and Dunham Focused.
Diversification Opportunities for Columbia Moderate and Dunham Focused
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Columbia and Dunham is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Moderate Growth and Dunham Focused Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Focused Large and Columbia Moderate 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 Columbia Moderate Growth are associated (or correlated) with Dunham Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Focused Large has no effect on the direction of Columbia Moderate i.e., Columbia Moderate and Dunham Focused go up and down completely randomly.
Pair Corralation between Columbia Moderate and Dunham Focused
Assuming the 90 days horizon Columbia Moderate is expected to generate 1.86 times less return on investment than Dunham Focused. But when comparing it to its historical volatility, Columbia Moderate Growth is 2.14 times less risky than Dunham Focused. It trades about 0.29 of its potential returns per unit of risk. Dunham Focused Large is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,782 in Dunham Focused Large on May 1, 2025 and sell it today you would earn a total of 638.00 from holding Dunham Focused Large or generate 16.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Moderate Growth vs. Dunham Focused Large
Performance |
| Timeline |
| Columbia Moderate Growth |
| Dunham Focused Large |
Columbia Moderate and Dunham Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Moderate and Dunham Focused
The main advantage of trading using opposite Columbia Moderate and Dunham Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Moderate position performs unexpectedly, Dunham Focused 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 Focused will offset losses from the drop in Dunham Focused's long position.| Columbia Moderate vs. Lord Abbett Convertible | Columbia Moderate vs. Calamos Dynamic Convertible | Columbia Moderate vs. Advent Claymore Convertible | Columbia Moderate vs. Rationalpier 88 Convertible |
| Dunham Focused vs. Cref Money Market | Dunham Focused vs. Dws Government Money | Dunham Focused vs. Schwab Government Money | Dunham Focused vs. Profunds Money |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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