Correlation Between Dunham Real and Manning Napier

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

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

Diversification Opportunities for Dunham Real and Manning Napier

0.54

Correlation Coefficient

Dunham Real  Manning Napier

Very weak diversification

The 3 months correlation between Dunham and Manning is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Manning Napier Rainier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Rainier and Dunham Real 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 Real Estate are associated (or correlated) with Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Rainier has no effect on the direction of Dunham Real i.e., Dunham Real and Manning Napier go up and down completely randomly.

Pair Corralation between Dunham Real and Manning Napier

Assuming the 90 days horizon Dunham Real Estate is expected to generate 1.2 times more return on investment than Manning Napier. However, Dunham Real is 1.2 times more volatile than Manning Napier Rainier. It trades about 0.09 of its potential returns per unit of risk. Manning Napier Rainier is currently generating about 0.06 per unit of risk. If you would invest  1,445  in Dunham Real Estate on September 9, 2024 and sell it today you would earn a total of  67.00  from holding Dunham Real Estate or generate 4.64% return on investment over 90 days.

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

Dunham Real Estate  vs.  Manning Napier Rainier

Dunham Real Estate

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Real Estate are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. 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.

Manning Napier Rainier

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Manning Napier Rainier are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Manning Napier 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 Real and Manning Napier

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

The idea behind Dunham Real Estate and Manning Napier Rainier 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.