Correlation Between Technology Ultrasector and Dunham Focused

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

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

Diversification Opportunities for Technology Ultrasector and Dunham Focused

0.96

Correlation Coefficient

Technology Ultrasector  Dunham Focused

Almost no diversification

The 3 months correlation between Technology and Dunham is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Technology Ultrasector Profund and Dunham Focused Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Focused Large and Technology Ultrasector 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 Technology Ultrasector Profund are associated (or correlated) with Dunham Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Focused Large has no effect on the direction of Technology Ultrasector i.e., Technology Ultrasector and Dunham Focused go up and down completely randomly.

Pair Corralation between Technology Ultrasector and Dunham Focused

Assuming the 90 days horizon Technology Ultrasector Profund is expected to generate 1.46 times more return on investment than Dunham Focused. However, Technology Ultrasector is 1.46 times more volatile than Dunham Focused Large. It trades about 0.22 of its potential returns per unit of risk. Dunham Focused Large is currently generating about 0.11 per unit of risk. If you would invest  3,576  in Technology Ultrasector Profund on May 18, 2025 and sell it today you would earn a total of  695.00  from holding Technology Ultrasector Profund or generate 19.44% return on investment over 90 days.

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

Technology Ultrasector Profund  vs.  Dunham Focused Large

Technology Ultrasector

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Technology Ultrasector Profund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Technology Ultrasector showed solid returns over the last few months and may actually be approaching a breakup point.

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 September 2025.

Pair Trading with Technology Ultrasector and Dunham Focused

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

The idea behind Technology Ultrasector Profund and Dunham Focused Large 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.