Correlation Between Global Gold and Dreyfus Government
Can any of the company-specific risk be diversified away by investing in both Global Gold and Dreyfus Government 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 Global Gold and Dreyfus Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Dreyfus Government Cash, you can compare the effects of market volatilities on Global Gold and Dreyfus Government 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 Global Gold with a short position of Dreyfus Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Dreyfus Government.
Diversification Opportunities for Global Gold and Dreyfus Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Dreyfus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Dreyfus Government Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Government Cash and Global Gold 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 Global Gold Fund are associated (or correlated) with Dreyfus Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Government Cash has no effect on the direction of Global Gold i.e., Global Gold and Dreyfus Government go up and down completely randomly.
Pair Corralation between Global Gold and Dreyfus Government
Assuming the 90 days horizon Global Gold Fund is expected to generate 6.28 times more return on investment than Dreyfus Government. However, Global Gold is 6.28 times more volatile than Dreyfus Government Cash. It trades about 0.1 of its potential returns per unit of risk. Dreyfus Government Cash is currently generating about 0.06 per unit of risk. If you would invest 911.00 in Global Gold Fund on November 3, 2024 and sell it today you would earn a total of 438.00 from holding Global Gold Fund or generate 48.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.63% |
| Values | Daily Returns |
Global Gold Fund vs. Dreyfus Government Cash
Performance |
| Timeline |
| Global Gold Fund |
| Dreyfus Government Cash |
Global Gold and Dreyfus Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Dreyfus Government
The main advantage of trading using opposite Global Gold and Dreyfus Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Dreyfus Government 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 Government will offset losses from the drop in Dreyfus Government's long position.| Global Gold vs. Vanguard Small Cap Value | Global Gold vs. Omni Small Cap Value | Global Gold vs. Heartland Value Plus | Global Gold vs. Fpa Queens Road |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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