Correlation Between Dunham Floating and Dunham Small
Can any of the company-specific risk be diversified away by investing in both Dunham Floating and Dunham 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 Dunham 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 Dunham Small Cap, you can compare the effects of market volatilities on Dunham Floating and Dunham 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 Dunham Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Floating and Dunham Small.
Diversification Opportunities for Dunham Floating and Dunham Small
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dunham and Dunham is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Floating Rate and Dunham Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Small Cap 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 Dunham Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Small Cap has no effect on the direction of Dunham Floating i.e., Dunham Floating and Dunham Small go up and down completely randomly.
Pair Corralation between Dunham Floating and Dunham Small
Assuming the 90 days horizon Dunham Floating is expected to generate 3.85 times less return on investment than Dunham Small. But when comparing it to its historical volatility, Dunham Floating Rate is 14.61 times less risky than Dunham Small. It trades about 0.51 of its potential returns per unit of risk. Dunham Small Cap is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,454 in Dunham Small Cap on November 8, 2024 and sell it today you would earn a total of 38.00 from holding Dunham Small Cap or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Floating Rate vs. Dunham Small Cap
Performance |
| Timeline |
| Dunham Floating Rate |
| Dunham Small Cap |
Dunham Floating and Dunham Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Floating and Dunham Small
The main advantage of trading using opposite Dunham Floating and Dunham Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Floating position performs unexpectedly, Dunham 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 Dunham Small will offset losses from the drop in Dunham Small's long position.| Dunham Floating vs. Transamerica Capital Growth | Dunham Floating vs. T Rowe Price | Dunham Floating vs. Small Pany Growth | Dunham Floating vs. Qs Defensive Growth |
| Dunham Small vs. Gabelli Global Financial | Dunham Small vs. Financial Industries Fund | Dunham Small vs. Davis Financial Fund | Dunham Small vs. Transamerica Financial Life |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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