Correlation Between Dunham Floating and Dunham High
Can any of the company-specific risk be diversified away by investing in both Dunham Floating and Dunham High 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 High 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 High Yield, you can compare the effects of market volatilities on Dunham Floating and Dunham High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Floating and Dunham High.
Diversification Opportunities for Dunham Floating and Dunham High
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dunham and Dunham is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Floating Rate and Dunham High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham High Yield 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 High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham High Yield has no effect on the direction of Dunham Floating i.e., Dunham Floating and Dunham High go up and down completely randomly.
Pair Corralation between Dunham Floating and Dunham High
Assuming the 90 days horizon Dunham Floating is expected to generate 1.74 times less return on investment than Dunham High. But when comparing it to its historical volatility, Dunham Floating Rate is 1.08 times less risky than Dunham High. It trades about 0.14 of its potential returns per unit of risk. Dunham High Yield is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 867.00 in Dunham High Yield on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Dunham High Yield or generate 0.81% 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. Dunham High Yield
Performance |
| Timeline |
| Dunham Floating Rate |
| Dunham High Yield |
Dunham Floating and Dunham High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Floating and Dunham High
The main advantage of trading using opposite Dunham Floating and Dunham High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Floating position performs unexpectedly, Dunham High 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 High will offset losses from the drop in Dunham High's long position.| Dunham Floating vs. Rbc Funds Trust | Dunham Floating vs. Balanced Fund Investor | Dunham Floating vs. Shelton Funds | Dunham Floating vs. Small Cap Stock |
| Dunham High vs. Vanguard High Yield Corporate | Dunham High vs. Vanguard High Yield Porate | Dunham High vs. Blackrock Hi Yld | Dunham High vs. Blackrock High Yield |
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 CEOs Directory module to screen CEOs from public companies around the world.
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