Correlation Between Dunham High and Vanguard Large-cap
Can any of the company-specific risk be diversified away by investing in both Dunham High and Vanguard Large-cap 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 High and Vanguard Large-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham High Yield and Vanguard Large Cap Index, you can compare the effects of market volatilities on Dunham High and Vanguard Large-cap 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 High with a short position of Vanguard Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Vanguard Large-cap.
Diversification Opportunities for Dunham High and Vanguard Large-cap
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dunham and Vanguard is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Vanguard Large Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Large Cap and Dunham High 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 High Yield are associated (or correlated) with Vanguard Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Large Cap has no effect on the direction of Dunham High i.e., Dunham High and Vanguard Large-cap go up and down completely randomly.
Pair Corralation between Dunham High and Vanguard Large-cap
Assuming the 90 days horizon Dunham High is expected to generate 2.31 times less return on investment than Vanguard Large-cap. But when comparing it to its historical volatility, Dunham High Yield is 4.73 times less risky than Vanguard Large-cap. It trades about 0.44 of its potential returns per unit of risk. Vanguard Large Cap Index is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 57,719 in Vanguard Large Cap Index on June 12, 2025 and sell it today you would earn a total of 4,743 from holding Vanguard Large Cap Index or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham High Yield vs. Vanguard Large Cap Index
Performance |
| Timeline |
| Dunham High Yield |
| Vanguard Large Cap |
Dunham High and Vanguard Large-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Vanguard Large-cap
The main advantage of trading using opposite Dunham High and Vanguard Large-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High position performs unexpectedly, Vanguard Large-cap 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 Vanguard Large-cap will offset losses from the drop in Vanguard Large-cap's long position.| Dunham High vs. Dimensional Retirement Income | Dunham High vs. Columbia Moderate Growth | Dunham High vs. Fidelity Managed Retirement | Dunham High vs. Multimanager Lifestyle Moderate |
| Vanguard Large-cap vs. Fidelity Series Emerging | Vanguard Large-cap vs. Delaware Emerging Markets | Vanguard Large-cap vs. Pace International Emerging | Vanguard Large-cap vs. Franklin Emerging Market |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |