Correlation Between Boston Partners and Dunham Floating

Can any of the company-specific risk be diversified away by investing in both Boston Partners 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 Boston Partners and Dunham Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boston Partners Small and Dunham Floating Rate, you can compare the effects of market volatilities on Boston Partners 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 Boston Partners with a short position of Dunham Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Dunham Floating.

Diversification Opportunities for Boston Partners and Dunham Floating

-0.22

Correlation Coefficient

Boston Partners  Dunham Floating

Very good diversification

The 3 months correlation between Boston and Dunham is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small 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 Boston Partners 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 Boston Partners Small 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 Boston Partners i.e., Boston Partners and Dunham Floating go up and down completely randomly.

Pair Corralation between Boston Partners and Dunham Floating

Assuming the 90 days horizon Boston Partners Small is expected to under-perform the Dunham Floating. In addition to that, Boston Partners is 26.35 times more volatile than Dunham Floating Rate. It trades about -0.16 of its total potential returns per unit of risk. Dunham Floating Rate is currently generating about 0.36 per unit of volatility. If you would invest  857.00  in Dunham Floating Rate on November 28, 2024 and sell it today you would earn a total of  13.00  from holding Dunham Floating Rate or generate 1.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Boston Partners Small  vs.  Dunham Floating Rate

Boston Partners Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Boston Partners Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Dunham Floating Rate

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Floating Rate are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dunham Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boston Partners and Dunham Floating

The main advantage of trading using opposite Boston Partners and Dunham Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners 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.

The idea behind Boston Partners Small and Dunham Floating Rate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.