Correlation Between Dunham Floating and Sentinel Small
Can any of the company-specific risk be diversified away by investing in both Dunham Floating and Sentinel Small 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 Floating and Sentinel Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Floating Rate and Sentinel Small Pany, you can compare the effects of market volatilities on Dunham Floating and Sentinel Small 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 Floating with a short position of Sentinel Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Floating and Sentinel Small.
Diversification Opportunities for Dunham Floating and Sentinel Small
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dunham and Sentinel is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Floating Rate and Sentinel Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Small Pany and Dunham Floating 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 Floating Rate are associated (or correlated) with Sentinel Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Small Pany has no effect on the direction of Dunham Floating i.e., Dunham Floating and Sentinel Small go up and down completely randomly.
Pair Corralation between Dunham Floating and Sentinel Small
Assuming the 90 days horizon Dunham Floating is expected to generate 24.81 times less return on investment than Sentinel Small. But when comparing it to its historical volatility, Dunham Floating Rate is 11.52 times less risky than Sentinel Small. It trades about 0.14 of its potential returns per unit of risk. Sentinel Small Pany is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 717.00 in Sentinel Small Pany on September 3, 2024 and sell it today you would earn a total of 63.00 from holding Sentinel Small Pany or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Floating Rate vs. Sentinel Small Pany
Performance |
| Timeline |
| Dunham Floating Rate |
| Sentinel Small Pany |
Dunham Floating and Sentinel Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Floating and Sentinel Small
The main advantage of trading using opposite Dunham Floating and Sentinel Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Floating position performs unexpectedly, Sentinel Small 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 Sentinel Small will offset losses from the drop in Sentinel Small's long position.| Dunham Floating vs. Ftfa Franklin Templeton Growth | Dunham Floating vs. Rational Defensive Growth | Dunham Floating vs. L Abbett Growth | Dunham Floating vs. Goldman Sachs Growth |
| Sentinel Small vs. Vanguard Small Cap Index | Sentinel Small vs. Vanguard Small Cap Index | Sentinel Small vs. Vanguard Small Cap Index | Sentinel Small vs. Vanguard Small Cap Index |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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