Correlation Between Gmo Alternative and Dunham Floating
Can any of the company-specific risk be diversified away by investing in both Gmo Alternative 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 Gmo Alternative and Dunham Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Alternative Allocation and Dunham Floating Rate, you can compare the effects of market volatilities on Gmo Alternative 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 Gmo Alternative with a short position of Dunham Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Alternative and Dunham Floating.
Diversification Opportunities for Gmo Alternative and Dunham Floating
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gmo and Dunham is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Alternative Allocation 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 Gmo Alternative 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 Gmo Alternative Allocation 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 Gmo Alternative i.e., Gmo Alternative and Dunham Floating go up and down completely randomly.
Pair Corralation between Gmo Alternative and Dunham Floating
Assuming the 90 days horizon Gmo Alternative Allocation is expected to generate 5.45 times more return on investment than Dunham Floating. However, Gmo Alternative is 5.45 times more volatile than Dunham Floating Rate. It trades about 0.19 of its potential returns per unit of risk. Dunham Floating Rate is currently generating about 0.57 per unit of risk. If you would invest 1,729 in Gmo Alternative Allocation on June 6, 2025 and sell it today you would earn a total of 80.00 from holding Gmo Alternative Allocation or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Alternative Allocation vs. Dunham Floating Rate
Performance |
| Timeline |
| Gmo Alternative Allo |
| Dunham Floating Rate |
Gmo Alternative and Dunham Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Alternative and Dunham Floating
The main advantage of trading using opposite Gmo Alternative and Dunham Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Alternative 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.| Gmo Alternative vs. John Hancock Money | Gmo Alternative vs. Tiaa Cref Life Money | Gmo Alternative vs. Prudential Government Money | Gmo Alternative vs. Edward Jones Money |
| Dunham Floating vs. Ab Municipal Bond | Dunham Floating vs. Vanguard Intermediate Term Tax Exempt | Dunham Floating vs. Bbh Intermediate Municipal | Dunham Floating vs. Virtus Seix Government |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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