Correlation Between Smallcap Fund and Dunham Us

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

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

Diversification Opportunities for Smallcap Fund and Dunham Us

0.94

Correlation Coefficient

Smallcap Fund  Dunham Us

Almost no diversification

The 3 months correlation between Smallcap and Dunham is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Fund Fka 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 Smallcap Fund 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 Smallcap Fund Fka are associated (or correlated) with Dunham Us. 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 Smallcap Fund i.e., Smallcap Fund and Dunham Us go up and down completely randomly.

Pair Corralation between Smallcap Fund and Dunham Us

Assuming the 90 days horizon Smallcap Fund is expected to generate 1.14 times less return on investment than Dunham Us. In addition to that, Smallcap Fund is 1.25 times more volatile than Dunham Enhanced Market. It trades about 0.16 of its total potential returns per unit of risk. Dunham Enhanced Market is currently generating about 0.24 per unit of volatility. If you would invest  1,364  in Dunham Enhanced Market on May 9, 2025 and sell it today you would earn a total of  157.00  from holding Dunham Enhanced Market or generate 11.51% return on investment over 90 days.

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

Smallcap Fund Fka  vs.  Dunham Enhanced Market

Smallcap Fund Fka

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap Fund Fka are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal primary indicators, Smallcap Fund may actually be approaching a critical reversion point that can send shares even higher in September 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 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dunham Us may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Smallcap Fund and Dunham Us

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

The idea behind Smallcap Fund Fka 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.