Correlation Between Legg Mason and Dunham Floating
Can any of the company-specific risk be diversified away by investing in both Legg Mason 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 Legg Mason and Dunham Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason Bw and Dunham Floating Rate, you can compare the effects of market volatilities on Legg Mason 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 Legg Mason with a short position of Dunham Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Dunham Floating.
Diversification Opportunities for Legg Mason and Dunham Floating
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Legg and Dunham is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw 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 Legg Mason 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 Legg Mason Bw 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 Legg Mason i.e., Legg Mason and Dunham Floating go up and down completely randomly.
Pair Corralation between Legg Mason and Dunham Floating
Assuming the 90 days horizon Legg Mason Bw is expected to generate 9.13 times more return on investment than Dunham Floating. However, Legg Mason is 9.13 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 0.56 per unit of risk. If you would invest 2,054 in Legg Mason Bw on June 9, 2025 and sell it today you would earn a total of 162.00 from holding Legg Mason Bw or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Dunham Floating Rate
Performance |
| Timeline |
| Legg Mason Bw |
| Dunham Floating Rate |
Legg Mason and Dunham Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Dunham Floating
The main advantage of trading using opposite Legg Mason and Dunham Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason 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.| Legg Mason vs. Rationalpier 88 Convertible | Legg Mason vs. Fidelity Sai Convertible | Legg Mason vs. Absolute Convertible Arbitrage | Legg Mason vs. Lord Abbett Convertible |
| Dunham Floating vs. Goldman Sachs Short | Dunham Floating vs. Franklin Emerging Market | Dunham Floating vs. Angel Oak Multi Strategy | Dunham Floating vs. Ab Select Longshort |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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