Correlation Between Dunham Focused and Dunham Enhanced

Can any of the company-specific risk be diversified away by investing in both Dunham Focused and Dunham Enhanced 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 Focused and Dunham Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dunham Focused Large and Dunham Enhanced Market, you can compare the effects of market volatilities on Dunham Focused and Dunham Enhanced 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 Focused with a short position of Dunham Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Focused and Dunham Enhanced.

Diversification Opportunities for Dunham Focused and Dunham Enhanced

0.72

Correlation Coefficient

Dunham Focused  Dunham Enhanced

Poor diversification

The 3 months correlation between Dunham and Dunham is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Focused Large and Dunham Enhanced Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Enhanced Market and Dunham Focused 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 Focused Large are associated (or correlated) with Dunham Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Enhanced Market has no effect on the direction of Dunham Focused i.e., Dunham Focused and Dunham Enhanced go up and down completely randomly.

Pair Corralation between Dunham Focused and Dunham Enhanced

If you would invest  3,045  in Dunham Focused Large on June 13, 2025 and sell it today you would earn a total of  1,163  from holding Dunham Focused Large or generate 38.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

Dunham Focused Large  vs.  Dunham Enhanced Market

Dunham Focused Large

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Focused Large are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dunham Focused may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Dunham Enhanced Market

Risk-Adjusted Performance

Solid

Over the last 90 days Dunham Enhanced Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak basic indicators, Dunham Enhanced may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Dunham Focused and Dunham Enhanced

The main advantage of trading using opposite Dunham Focused and Dunham Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Focused position performs unexpectedly, Dunham Enhanced 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 Enhanced will offset losses from the drop in Dunham Enhanced's long position.

The idea behind Dunham Focused Large and Dunham Enhanced Market pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.