Correlation Between Dunham Monthly and Dunham Emerging
Can any of the company-specific risk be diversified away by investing in both Dunham Monthly and Dunham Emerging 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 Monthly and Dunham Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Monthly Distribution and Dunham Emerging Markets, you can compare the effects of market volatilities on Dunham Monthly and Dunham Emerging 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 Monthly with a short position of Dunham Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Monthly and Dunham Emerging.
Diversification Opportunities for Dunham Monthly and Dunham Emerging
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dunham and Dunham is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Monthly Distribution and Dunham Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Emerging Markets and Dunham Monthly 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 Monthly Distribution are associated (or correlated) with Dunham Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Emerging Markets has no effect on the direction of Dunham Monthly i.e., Dunham Monthly and Dunham Emerging go up and down completely randomly.
Pair Corralation between Dunham Monthly and Dunham Emerging
Assuming the 90 days horizon Dunham Monthly is expected to generate 2.87 times less return on investment than Dunham Emerging. But when comparing it to its historical volatility, Dunham Monthly Distribution is 6.0 times less risky than Dunham Emerging. It trades about 0.27 of its potential returns per unit of risk. Dunham Emerging Markets is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,466 in Dunham Emerging Markets on June 6, 2025 and sell it today you would earn a total of 91.00 from holding Dunham Emerging Markets or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Monthly Distribution vs. Dunham Emerging Markets
Performance |
| Timeline |
| Dunham Monthly Distr |
| Dunham Emerging Markets |
Dunham Monthly and Dunham Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Monthly and Dunham Emerging
The main advantage of trading using opposite Dunham Monthly and Dunham Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Monthly position performs unexpectedly, Dunham Emerging 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 Emerging will offset losses from the drop in Dunham Emerging's long position.| Dunham Monthly vs. Dunham Dynamic Macro | Dunham Monthly vs. Dunham Appreciation Income | Dunham Monthly vs. Dunham Porategovernment Bond | Dunham Monthly vs. Dunham Small Cap |
| Dunham Emerging vs. Dunham Appreciation Income | Dunham Emerging vs. Dunham Dynamic Macro | Dunham Emerging vs. Dunham Porategovernment Bond | Dunham Emerging vs. Dunham Small Cap |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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