Correlation Between World Energy and Dreyfus Global
Can any of the company-specific risk be diversified away by investing in both World Energy and Dreyfus Global 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 World Energy and Dreyfus Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Energy Fund and Dreyfus Global Dynamic, you can compare the effects of market volatilities on World Energy and Dreyfus Global 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 World Energy with a short position of Dreyfus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Energy and Dreyfus Global.
Diversification Opportunities for World Energy and Dreyfus Global
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between World and Dreyfus is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund and Dreyfus Global Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Global Dynamic and World Energy 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 World Energy Fund are associated (or correlated) with Dreyfus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Global Dynamic has no effect on the direction of World Energy i.e., World Energy and Dreyfus Global go up and down completely randomly.
Pair Corralation between World Energy and Dreyfus Global
Assuming the 90 days horizon World Energy Fund is expected to generate 6.76 times more return on investment than Dreyfus Global. However, World Energy is 6.76 times more volatile than Dreyfus Global Dynamic. It trades about 0.07 of its potential returns per unit of risk. Dreyfus Global Dynamic is currently generating about 0.23 per unit of risk. If you would invest 1,355 in World Energy Fund on September 13, 2024 and sell it today you would earn a total of 144.00 from holding World Energy Fund or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Energy Fund vs. Dreyfus Global Dynamic
Performance |
| Timeline |
| World Energy |
| Dreyfus Global Dynamic |
World Energy and Dreyfus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Energy and Dreyfus Global
The main advantage of trading using opposite World Energy and Dreyfus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Energy position performs unexpectedly, Dreyfus Global 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 Global will offset losses from the drop in Dreyfus Global's long position.| World Energy vs. Hennessy Bp Energy | World Energy vs. Franklin Natural Resources | World Energy vs. Icon Natural Resources | World Energy vs. Gamco Natural Resources |
| Dreyfus Global vs. Dreyfus High Yield | Dreyfus Global vs. Dreyfusthe Boston Pany | Dreyfus Global vs. Dreyfus International Bond | Dreyfus Global vs. Dreyfus International Bond |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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