Correlation Between Dunham Focused and Multi-manager Global

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

Diversification Opportunities for Dunham Focused and Multi-manager Global

0.89

Correlation Coefficient

Dunham Focused  Multi-manager Global

Very poor diversification

The 3 months correlation between Dunham and Multi-manager is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Focused Large and Multi Manager Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager Global 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 Multi-manager Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager Global has no effect on the direction of Dunham Focused i.e., Dunham Focused and Multi-manager Global go up and down completely randomly.

Pair Corralation between Dunham Focused and Multi-manager Global

Assuming the 90 days horizon Dunham Focused Large is expected to generate 1.44 times more return on investment than Multi-manager Global. However, Dunham Focused is 1.44 times more volatile than Multi Manager Global Real. It trades about 0.27 of its potential returns per unit of risk. Multi Manager Global Real is currently generating about 0.15 per unit of risk. If you would invest  3,716  in Dunham Focused Large on April 25, 2025 and sell it today you would earn a total of  671.00  from holding Dunham Focused Large or generate 18.06% return on investment over 90 days.

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

Dunham Focused Large  vs.  Multi Manager Global Real

Dunham Focused Large

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Focused Large are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dunham Focused showed solid returns over the last few months and may actually be approaching a breakup point.

Multi Manager Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Manager Global Real are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Multi-manager Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Dunham Focused and Multi-manager Global

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

The idea behind Dunham Focused Large and Multi Manager Global Real 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.