Correlation Between Floating Rate and Dunham Floating
Can any of the company-specific risk be diversified away by investing in both Floating Rate 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 Floating Rate and Dunham Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floating Rate Fund and Dunham Floating Rate, you can compare the effects of market volatilities on Floating Rate 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 Floating Rate with a short position of Dunham Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floating Rate and Dunham Floating.
Diversification Opportunities for Floating Rate and Dunham Floating
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Floating and Dunham is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Floating Rate Fund 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 Floating Rate 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 Floating Rate Fund 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 Floating Rate i.e., Floating Rate and Dunham Floating go up and down completely randomly.
Pair Corralation between Floating Rate and Dunham Floating
Assuming the 90 days horizon Floating Rate is expected to generate 1.25 times less return on investment than Dunham Floating. In addition to that, Floating Rate is 1.39 times more volatile than Dunham Floating Rate. It trades about 0.38 of its total potential returns per unit of risk. Dunham Floating Rate is currently generating about 0.65 per unit of volatility. If you would invest 831.00 in Dunham Floating Rate on April 23, 2025 and sell it today you would earn a total of 36.00 from holding Dunham Floating Rate or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floating Rate Fund vs. Dunham Floating Rate
Performance |
| Timeline |
| Floating Rate |
| Dunham Floating Rate |
Floating Rate and Dunham Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floating Rate and Dunham Floating
The main advantage of trading using opposite Floating Rate and Dunham Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floating Rate 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.| Floating Rate vs. Pace Smallmedium Value | Floating Rate vs. Fpa Queens Road | Floating Rate vs. Valic Company I | Floating Rate vs. Ab Discovery Value |
| Dunham Floating vs. Americafirst Large Cap | Dunham Floating vs. Bmo Large Cap Growth | Dunham Floating vs. M Large Cap | Dunham Floating vs. Prudential Qma 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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