Correlation Between Dunham Dynamic and Dunham Appreciation
Can any of the company-specific risk be diversified away by investing in both Dunham Dynamic and Dunham Appreciation 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 Dynamic and Dunham Appreciation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Dynamic Macro and Dunham Appreciation Income, you can compare the effects of market volatilities on Dunham Dynamic and Dunham Appreciation 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 Dynamic with a short position of Dunham Appreciation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Dynamic and Dunham Appreciation.
Diversification Opportunities for Dunham Dynamic and Dunham Appreciation
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dunham and Dunham is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Dynamic Macro and Dunham Appreciation Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Appreciation and Dunham Dynamic 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 Dynamic Macro are associated (or correlated) with Dunham Appreciation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Appreciation has no effect on the direction of Dunham Dynamic i.e., Dunham Dynamic and Dunham Appreciation go up and down completely randomly.
Pair Corralation between Dunham Dynamic and Dunham Appreciation
Assuming the 90 days horizon Dunham Dynamic Macro is expected to generate 3.66 times more return on investment than Dunham Appreciation. However, Dunham Dynamic is 3.66 times more volatile than Dunham Appreciation Income. It trades about 0.17 of its potential returns per unit of risk. Dunham Appreciation Income is currently generating about 0.55 per unit of risk. If you would invest 1,229 in Dunham Dynamic Macro on May 27, 2025 and sell it today you would earn a total of 8.00 from holding Dunham Dynamic Macro or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Dynamic Macro vs. Dunham Appreciation Income
Performance |
| Timeline |
| Dunham Dynamic Macro |
| Dunham Appreciation |
Dunham Dynamic and Dunham Appreciation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Dynamic and Dunham Appreciation
The main advantage of trading using opposite Dunham Dynamic and Dunham Appreciation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Dynamic position performs unexpectedly, Dunham Appreciation 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 Appreciation will offset losses from the drop in Dunham Appreciation's long position.| Dunham Dynamic vs. Allianzgi Convertible Income | Dunham Dynamic vs. Calamos Dynamic Convertible | Dunham Dynamic vs. Harbor Vertible Securities | Dunham Dynamic vs. The Gamco Global |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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