Correlation Between Dunham Real and Dunham Enhanced

Can any of the company-specific risk be diversified away by investing in both Dunham Real 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 Real 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 Real Estate and Dunham Enhanced Market, you can compare the effects of market volatilities on Dunham Real 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 Real with a short position of Dunham Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Dunham Enhanced.

Diversification Opportunities for Dunham Real and Dunham Enhanced

0.39

Correlation Coefficient

Dunham Real  Dunham Enhanced

Weak diversification

The 3 months correlation between Dunham and Dunham is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate 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 Real 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 Real Estate 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 Real i.e., Dunham Real and Dunham Enhanced go up and down completely randomly.

Pair Corralation between Dunham Real and Dunham Enhanced

Assuming the 90 days horizon Dunham Real is expected to generate 1.39 times less return on investment than Dunham Enhanced. In addition to that, Dunham Real is 1.32 times more volatile than Dunham Enhanced Market. It trades about 0.17 of its total potential returns per unit of risk. Dunham Enhanced Market is currently generating about 0.31 per unit of volatility. If you would invest  1,349  in Dunham Enhanced Market on May 1, 2025 and sell it today you would earn a total of  196.00  from holding Dunham Enhanced Market or generate 14.53% return on investment over 90 days.

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

Dunham Real Estate  vs.  Dunham Enhanced Market

Dunham Real Estate

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Real Estate are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dunham Real may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Dunham Enhanced Market

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Enhanced Market are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dunham Enhanced showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dunham Real and Dunham Enhanced

The main advantage of trading using opposite Dunham Real and Dunham Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real 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 Real Estate 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.