Correlation Between Dunham Porategovernment and Sp Smallcap
Can any of the company-specific risk be diversified away by investing in both Dunham Porategovernment and Sp Smallcap 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 Porategovernment and Sp Smallcap 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 Sp Smallcap Index, you can compare the effects of market volatilities on Dunham Porategovernment and Sp Smallcap 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 Porategovernment with a short position of Sp Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Porategovernment and Sp Smallcap.
Diversification Opportunities for Dunham Porategovernment and Sp Smallcap
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dunham and SMLKX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Sp Smallcap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp Smallcap Index and Dunham Porategovernment 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 Sp Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp Smallcap Index has no effect on the direction of Dunham Porategovernment i.e., Dunham Porategovernment and Sp Smallcap go up and down completely randomly.
Pair Corralation between Dunham Porategovernment and Sp Smallcap
Assuming the 90 days horizon Dunham Porategovernment is expected to generate 2.28 times less return on investment than Sp Smallcap. But when comparing it to its historical volatility, Dunham Porategovernment Bond is 4.41 times less risky than Sp Smallcap. It trades about 0.07 of its potential returns per unit of risk. Sp Smallcap Index is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,736 in Sp Smallcap Index on June 3, 2025 and sell it today you would earn a total of 395.00 from holding Sp Smallcap Index or generate 22.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Sp Smallcap Index
Performance |
| Timeline |
| Dunham Porategovernment |
| Sp Smallcap Index |
Dunham Porategovernment and Sp Smallcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Porategovernment and Sp Smallcap
The main advantage of trading using opposite Dunham Porategovernment and Sp Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Porategovernment position performs unexpectedly, Sp Smallcap 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 Sp Smallcap will offset losses from the drop in Sp Smallcap's long position.| Dunham Porategovernment vs. Dunham Dynamic Macro | Dunham Porategovernment vs. Dunham Appreciation Income | Dunham Porategovernment vs. Dunham Small Cap | Dunham Porategovernment vs. Dunham Emerging Markets |
| Sp Smallcap vs. Astor Star Fund | Sp Smallcap vs. Omni Small Cap Value | Sp Smallcap vs. Semiconductor Ultrasector Profund | Sp Smallcap vs. Tactical Multi Purpose Fund |
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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