Correlation Between Conquer Risk and Dunham Focused

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

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

Diversification Opportunities for Conquer Risk and Dunham Focused

0.34

Correlation Coefficient

Conquer Risk  Dunham Focused

Weak diversification

The 3 months correlation between Conquer and Dunham is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Conquer Risk Tactical 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 Conquer Risk 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 Conquer Risk Tactical 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 Conquer Risk i.e., Conquer Risk and Dunham Focused go up and down completely randomly.

Pair Corralation between Conquer Risk and Dunham Focused

Assuming the 90 days horizon Conquer Risk Tactical is expected to generate 0.16 times more return on investment than Dunham Focused. However, Conquer Risk Tactical is 6.41 times less risky than Dunham Focused. It trades about -0.07 of its potential returns per unit of risk. Dunham Focused Large is currently generating about -0.29 per unit of risk. If you would invest  1,068  in Conquer Risk Tactical on October 15, 2024 and sell it today you would lose (8.00) from holding Conquer Risk Tactical or give up 0.75% of portfolio value over 90 days.

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

Conquer Risk Tactical  vs.  Dunham Focused Large

Conquer Risk Tactical

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Conquer Risk Tactical are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Conquer Risk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dunham Focused Large

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dunham Focused Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Conquer Risk and Dunham Focused

The main advantage of trading using opposite Conquer Risk and Dunham Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conquer Risk 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 Conquer Risk Tactical 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.