Correlation Between Dunham Dynamic and Dunham Floating
Can any of the company-specific risk be diversified away by investing in both Dunham Dynamic and Dunham Floating 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 Dynamic and Dunham Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Dynamic Macro and Dunham Floating Rate, you can compare the effects of market volatilities on Dunham Dynamic and Dunham Floating 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 Dynamic with a short position of Dunham Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Dynamic and Dunham Floating.
Diversification Opportunities for Dunham Dynamic and Dunham Floating
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dunham and Dunham is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Dynamic Macro and Dunham Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Floating Rate and Dunham Dynamic 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 Dynamic Macro are associated (or correlated) with Dunham Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Floating Rate has no effect on the direction of Dunham Dynamic i.e., Dunham Dynamic and Dunham Floating go up and down completely randomly.
Pair Corralation between Dunham Dynamic and Dunham Floating
Assuming the 90 days horizon Dunham Dynamic Macro is expected to generate 1.55 times more return on investment than Dunham Floating. However, Dunham Dynamic is 1.55 times more volatile than Dunham Floating Rate. It trades about 0.28 of its potential returns per unit of risk. Dunham Floating Rate is currently generating about 0.16 per unit of risk. If you would invest 1,238 in Dunham Dynamic Macro on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Dunham Dynamic Macro or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Dynamic Macro vs. Dunham Floating Rate
Performance |
| Timeline |
| Dunham Dynamic Macro |
| Dunham Floating Rate |
Dunham Dynamic and Dunham Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Dynamic and Dunham Floating
The main advantage of trading using opposite Dunham Dynamic and Dunham Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Dynamic position performs unexpectedly, Dunham Floating 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 Floating will offset losses from the drop in Dunham Floating's long position.| Dunham Dynamic vs. Dunham Appreciation Income | Dunham Dynamic vs. Dunham Porategovernment Bond | Dunham Dynamic vs. Dunham Small Cap | Dunham Dynamic vs. Dunham Emerging Markets |
| Dunham Floating vs. Touchstone Large Cap | Dunham Floating vs. Aqr Large Cap | Dunham Floating vs. Dunham Large Cap | Dunham Floating vs. Qs Large Cap |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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