Correlation Between American Beacon and Dreyfus Opportunistic
Can any of the company-specific risk be diversified away by investing in both American Beacon 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 American Beacon and Dreyfus Opportunistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Small and Dreyfus Opportunistic Midcap, you can compare the effects of market volatilities on American Beacon 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 American Beacon with a short position of Dreyfus Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Dreyfus Opportunistic.
Diversification Opportunities for American Beacon and Dreyfus Opportunistic
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Dreyfus is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Small and Dreyfus Opportunistic Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Opportunistic and American Beacon 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 American Beacon Small 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 American Beacon i.e., American Beacon and Dreyfus Opportunistic go up and down completely randomly.
Pair Corralation between American Beacon and Dreyfus Opportunistic
Assuming the 90 days horizon American Beacon Small is expected to generate 1.44 times more return on investment than Dreyfus Opportunistic. However, American Beacon is 1.44 times more volatile than Dreyfus Opportunistic Midcap. It trades about 0.06 of its potential returns per unit of risk. Dreyfus Opportunistic Midcap is currently generating about 0.06 per unit of risk. If you would invest 2,113 in American Beacon Small on September 12, 2024 and sell it today you would earn a total of 746.00 from holding American Beacon Small or generate 35.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Small vs. Dreyfus Opportunistic Midcap
Performance |
| Timeline |
| American Beacon Small |
| Dreyfus Opportunistic |
American Beacon and Dreyfus Opportunistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Dreyfus Opportunistic
The main advantage of trading using opposite American Beacon and Dreyfus Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon 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.| American Beacon vs. Vanguard Small Cap Value | American Beacon vs. SCOR PK | American Beacon vs. Morningstar Unconstrained Allocation | American Beacon vs. Thrivent High Yield |
| Dreyfus Opportunistic vs. Vanguard Mid Cap Index | Dreyfus Opportunistic vs. SCOR PK | Dreyfus Opportunistic vs. Morningstar Unconstrained Allocation | Dreyfus Opportunistic vs. Via Renewables |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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