Correlation Between Dunham Focused and Dana Large

Can any of the company-specific risk be diversified away by investing in both Dunham Focused and Dana Large 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 Dana Large 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 Dana Large Cap, you can compare the effects of market volatilities on Dunham Focused and Dana Large 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 Dana Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Focused and Dana Large.

Diversification Opportunities for Dunham Focused and Dana Large

0.97

Correlation Coefficient

Dunham Focused  Dana Large

Almost no diversification

The 3 months correlation between Dunham and Dana is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Focused Large and Dana Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Large Cap 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 Dana Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Large Cap has no effect on the direction of Dunham Focused i.e., Dunham Focused and Dana Large go up and down completely randomly.

Pair Corralation between Dunham Focused and Dana Large

Assuming the 90 days horizon Dunham Focused Large is expected to generate 1.31 times more return on investment than Dana Large. However, Dunham Focused is 1.31 times more volatile than Dana Large Cap. It trades about 0.18 of its potential returns per unit of risk. Dana Large Cap is currently generating about 0.22 per unit of risk. If you would invest  3,847  in Dunham Focused Large on May 5, 2025 and sell it today you would earn a total of  462.00  from holding Dunham Focused Large or generate 12.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Dunham Focused Large  vs.  Dana Large Cap

Dunham Focused Large

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Focused Large are ranked lower than 14 (%) 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 September 2025.

Dana Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dana Large Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Dana Large may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Dunham Focused and Dana Large

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

The idea behind Dunham Focused Large and Dana Large Cap 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.