Correlation Between Dunham Enhanced and Dunham Dynamic
Can any of the company-specific risk be diversified away by investing in both Dunham Enhanced and Dunham Dynamic 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 Enhanced and Dunham Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Enhanced Market and Dunham Dynamic Macro, you can compare the effects of market volatilities on Dunham Enhanced and Dunham Dynamic 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 Enhanced with a short position of Dunham Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Enhanced and Dunham Dynamic.
Diversification Opportunities for Dunham Enhanced and Dunham Dynamic
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dunham and Dunham is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Enhanced Market and Dunham Dynamic Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Dynamic Macro and Dunham Enhanced 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 Enhanced Market are associated (or correlated) with Dunham Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Dynamic Macro has no effect on the direction of Dunham Enhanced i.e., Dunham Enhanced and Dunham Dynamic go up and down completely randomly.
Pair Corralation between Dunham Enhanced and Dunham Dynamic
Assuming the 90 days horizon Dunham Enhanced Market is expected to generate 3.68 times more return on investment than Dunham Dynamic. However, Dunham Enhanced is 3.68 times more volatile than Dunham Dynamic Macro. It trades about 0.24 of its potential returns per unit of risk. Dunham Dynamic Macro is currently generating about 0.08 per unit of risk. If you would invest 1,423 in Dunham Enhanced Market on May 27, 2025 and sell it today you would earn a total of 144.00 from holding Dunham Enhanced Market or generate 10.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Dunham Enhanced Market vs. Dunham Dynamic Macro
Performance |
| Timeline |
| Dunham Enhanced Market |
| Dunham Dynamic Macro |
Dunham Enhanced and Dunham Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Enhanced and Dunham Dynamic
The main advantage of trading using opposite Dunham Enhanced and Dunham Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Enhanced position performs unexpectedly, Dunham Dynamic 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 Dynamic will offset losses from the drop in Dunham Dynamic's long position.| Dunham Enhanced vs. Voya Solution Conservative | Dunham Enhanced vs. Tax Free Conservative Income | Dunham Enhanced vs. Victory Diversified Stock | Dunham Enhanced vs. Calvert Conservative Allocation |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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