Correlation Between Real Assets and Dunham Real

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

By analyzing existing cross correlation between Real Assets Portfolio and Dunham Real Estate, you can compare the effects of market volatilities on Real Assets and Dunham Real 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 Real Assets with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Assets and Dunham Real.

Diversification Opportunities for Real Assets and Dunham Real

0.65

Correlation Coefficient

Real Assets  Dunham Real

Poor diversification

The 3 months correlation between Real and Dunham is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Real Assets Portfolio and Dunham Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Real Estate and Real Assets 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 Real Assets Portfolio are associated (or correlated) with Dunham Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Real Estate has no effect on the direction of Real Assets i.e., Real Assets and Dunham Real go up and down completely randomly.

Pair Corralation between Real Assets and Dunham Real

Assuming the 90 days horizon Real Assets Portfolio is expected to under-perform the Dunham Real. In addition to that, Real Assets is 1.61 times more volatile than Dunham Real Estate. It trades about -0.19 of its total potential returns per unit of risk. Dunham Real Estate is currently generating about -0.05 per unit of volatility. If you would invest  1,446  in Dunham Real Estate on October 7, 2024 and sell it today you would lose (29.00) from holding Dunham Real Estate or give up 2.01% of portfolio value over 90 days.

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

Real Assets Portfolio  vs.  Dunham Real Estate

Real Assets Portfolio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Real Assets Portfolio 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 February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Dunham Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Real Assets and Dunham Real

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

The idea behind Real Assets Portfolio and Dunham Real Estate 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.