Correlation Between Dunham High and Pacific Funds

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

By analyzing existing cross correlation between Dunham High Yield and Pacific Funds Small Cap, you can compare the effects of market volatilities on Dunham High and Pacific Funds 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 High with a short position of Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Pacific Funds.

Diversification Opportunities for Dunham High and Pacific Funds

-0.15

Correlation Coefficient

Dunham High  Pacific Funds

Good diversification

The 3 months correlation between Dunham and Pacific is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Pacific Funds Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Small and Dunham High 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 High Yield are associated (or correlated) with Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Small has no effect on the direction of Dunham High i.e., Dunham High and Pacific Funds go up and down completely randomly.

Pair Corralation between Dunham High and Pacific Funds

If you would invest  774.00  in Dunham High Yield on October 5, 2024 and sell it today you would earn a total of  102.00  from holding Dunham High Yield or generate 13.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.32%
Values	Daily Returns

Dunham High Yield  vs.  Pacific Funds Small Cap

Dunham High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dunham High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dunham High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pacific Funds Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacific Funds Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Pacific Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dunham High and Pacific Funds

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

The idea behind Dunham High Yield and Pacific Funds Small Cap 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.