Correlation Between Applied Finance and Dreyfus Opportunistic
Can any of the company-specific risk be diversified away by investing in both Applied Finance and Dreyfus Opportunistic 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 Applied Finance and Dreyfus Opportunistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Dreyfus Opportunistic Midcap, you can compare the effects of market volatilities on Applied Finance and Dreyfus Opportunistic 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 Applied Finance with a short position of Dreyfus Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Dreyfus Opportunistic.
Diversification Opportunities for Applied Finance and Dreyfus Opportunistic
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Applied and Dreyfus is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Dreyfus Opportunistic Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Opportunistic and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Dreyfus Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Opportunistic has no effect on the direction of Applied Finance i.e., Applied Finance and Dreyfus Opportunistic go up and down completely randomly.
Pair Corralation between Applied Finance and Dreyfus Opportunistic
Assuming the 90 days horizon Applied Finance is expected to generate 1.05 times less return on investment than Dreyfus Opportunistic. In addition to that, Applied Finance is 1.58 times more volatile than Dreyfus Opportunistic Midcap. It trades about 0.05 of its total potential returns per unit of risk. Dreyfus Opportunistic Midcap is currently generating about 0.09 per unit of volatility. If you would invest 3,388 in Dreyfus Opportunistic Midcap on September 13, 2024 and sell it today you would earn a total of 94.00 from holding Dreyfus Opportunistic Midcap or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Finance Explorer vs. Dreyfus Opportunistic Midcap
Performance |
| Timeline |
| Applied Finance Explorer |
| Dreyfus Opportunistic |
Applied Finance and Dreyfus Opportunistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Finance and Dreyfus Opportunistic
The main advantage of trading using opposite Applied Finance and Dreyfus Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Dreyfus Opportunistic 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 Dreyfus Opportunistic will offset losses from the drop in Dreyfus Opportunistic's long position.| Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small | Applied Finance vs. Oberweis Small Cap Opportunities |
| Dreyfus Opportunistic vs. Applied Finance Explorer | Dreyfus Opportunistic vs. Lord Abbett Small | Dreyfus Opportunistic vs. Palm Valley Capital | Dreyfus Opportunistic vs. Ab Small 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |