Correlation Between Dunham Corporate/govern and Midcap Growth
Can any of the company-specific risk be diversified away by investing in both Dunham Corporate/govern and Midcap Growth 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 Corporate/govern and Midcap Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Porategovernment Bond and Midcap Growth Fund, you can compare the effects of market volatilities on Dunham Corporate/govern and Midcap Growth 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 Corporate/govern with a short position of Midcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Corporate/govern and Midcap Growth.
Diversification Opportunities for Dunham Corporate/govern and Midcap Growth
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dunham and Midcap is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Midcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Growth and Dunham Corporate/govern 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 Porategovernment Bond are associated (or correlated) with Midcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Growth has no effect on the direction of Dunham Corporate/govern i.e., Dunham Corporate/govern and Midcap Growth go up and down completely randomly.
Pair Corralation between Dunham Corporate/govern and Midcap Growth
Assuming the 90 days horizon Dunham Corporate/govern is expected to generate 2.95 times less return on investment than Midcap Growth. But when comparing it to its historical volatility, Dunham Porategovernment Bond is 4.4 times less risky than Midcap Growth. It trades about 0.23 of its potential returns per unit of risk. Midcap Growth Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,173 in Midcap Growth Fund on June 8, 2025 and sell it today you would earn a total of 116.00 from holding Midcap Growth Fund or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Midcap Growth Fund
Performance |
| Timeline |
| Dunham Porategovernment |
| Midcap Growth |
Dunham Corporate/govern and Midcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Corporate/govern and Midcap Growth
The main advantage of trading using opposite Dunham Corporate/govern and Midcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Corporate/govern position performs unexpectedly, Midcap Growth 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 Midcap Growth will offset losses from the drop in Midcap Growth's long position.| Dunham Corporate/govern vs. Dunham Dynamic Macro | Dunham Corporate/govern vs. Dunham Appreciation Income | Dunham Corporate/govern vs. Dunham Small Cap | Dunham Corporate/govern vs. Dunham Emerging Markets |
| Midcap Growth vs. Barings Active Short | Midcap Growth vs. Victory Diversified Stock | Midcap Growth vs. Western Asset Short | Midcap Growth vs. Ashmore Emerging Markets |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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