Correlation Between Dunham Large and Pnc International

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

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

Diversification Opportunities for Dunham Large and Pnc International

0.02

Correlation Coefficient

Dunham Large  Pnc International

Significant diversification

The 3 months correlation between Dunham and Pnc is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Pnc International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pnc International Equity and Dunham Large 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 Large Cap are associated (or correlated) with Pnc International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pnc International Equity has no effect on the direction of Dunham Large i.e., Dunham Large and Pnc International go up and down completely randomly.

Pair Corralation between Dunham Large and Pnc International

Assuming the 90 days horizon Dunham Large Cap is expected to generate 0.24 times more return on investment than Pnc International. However, Dunham Large Cap is 4.13 times less risky than Pnc International. It trades about -0.4 of its potential returns per unit of risk. Pnc International Equity is currently generating about -0.27 per unit of risk. If you would invest  2,130  in Dunham Large Cap on September 25, 2024 and sell it today you would lose (114.00) from holding Dunham Large Cap or give up 5.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Dunham Large Cap  vs.  Pnc International Equity

Dunham Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pnc International Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pnc International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Dunham Large and Pnc International

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

The idea behind Dunham Large Cap and Pnc International Equity 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.