Correlation Between Fisher Investments and Dunham Focused

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

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

Diversification Opportunities for Fisher Investments and Dunham Focused

0.88

Correlation Coefficient

Fisher Investments  Dunham Focused

Very poor diversification

The 3 months correlation between Fisher and Dunham is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Small Cap 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 Fisher Investments 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 Fisher Small Cap 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 Fisher Investments i.e., Fisher Investments and Dunham Focused go up and down completely randomly.

Pair Corralation between Fisher Investments and Dunham Focused

Assuming the 90 days horizon Fisher Investments is expected to generate 1.01 times less return on investment than Dunham Focused. In addition to that, Fisher Investments is 1.26 times more volatile than Dunham Focused Large. It trades about 0.17 of its total potential returns per unit of risk. Dunham Focused Large is currently generating about 0.21 per unit of volatility. If you would invest  3,548  in Dunham Focused Large on September 4, 2024 and sell it today you would earn a total of  510.00  from holding Dunham Focused Large or generate 14.37% return on investment over 90 days.

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

Fisher Small Cap  vs.  Dunham Focused Large

Fisher Investments

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Small Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fisher Investments showed solid returns over the last few months and may actually be approaching a breakup point.

Dunham Focused Large

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Focused Large are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dunham Focused showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fisher Investments and Dunham Focused

The main advantage of trading using opposite Fisher Investments and Dunham Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Investments 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 Fisher Small Cap 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.