Correlation Between Dunham Floating and Dunham Enhanced

Can any of the company-specific risk be diversified away by investing in both Dunham Floating and Dunham Enhanced 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 Enhanced 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 Enhanced Market, you can compare the effects of market volatilities on Dunham Floating and Dunham Enhanced 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 Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Floating and Dunham Enhanced.

Diversification Opportunities for Dunham Floating and Dunham Enhanced

0.77

Correlation Coefficient

Dunham Floating  Dunham Enhanced

Poor diversification

The 3 months correlation between Dunham and Dunham is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Floating Rate and Dunham Enhanced Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Enhanced Market 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 Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Enhanced Market has no effect on the direction of Dunham Floating i.e., Dunham Floating and Dunham Enhanced go up and down completely randomly.

Pair Corralation between Dunham Floating and Dunham Enhanced

Assuming the 90 days horizon Dunham Floating Rate is expected to generate 0.07 times more return on investment than Dunham Enhanced. However, Dunham Floating Rate is 13.46 times less risky than Dunham Enhanced. It trades about 0.25 of its potential returns per unit of risk. Dunham Enhanced Market is currently generating about 0.01 per unit of risk. If you would invest  746.00  in Dunham Floating Rate on May 18, 2025 and sell it today you would earn a total of  119.00  from holding Dunham Floating Rate or generate 15.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Dunham Floating Rate  vs.  Dunham Enhanced Market

Dunham Floating Rate

Risk-Adjusted Performance

Prime

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Floating Rate are ranked lower than 42 (%) 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.

Dunham Enhanced Market

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Enhanced Market are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dunham Enhanced may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Dunham Floating and Dunham Enhanced

The main advantage of trading using opposite Dunham Floating and Dunham Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Floating position performs unexpectedly, Dunham Enhanced 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 Enhanced will offset losses from the drop in Dunham Enhanced's long position.

The idea behind Dunham Floating Rate and Dunham Enhanced Market 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.