Correlation Between Berkshire Focus and Dreyfus Opportunistic
Can any of the company-specific risk be diversified away by investing in both Berkshire Focus 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 Berkshire Focus and Dreyfus Opportunistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Focus and Dreyfus Opportunistic Midcap, you can compare the effects of market volatilities on Berkshire Focus 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 Berkshire Focus with a short position of Dreyfus Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Focus and Dreyfus Opportunistic.
Diversification Opportunities for Berkshire Focus and Dreyfus Opportunistic
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Berkshire and Dreyfus is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Focus and Dreyfus Opportunistic Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Opportunistic and Berkshire Focus 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 Berkshire Focus 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 Berkshire Focus i.e., Berkshire Focus and Dreyfus Opportunistic go up and down completely randomly.
Pair Corralation between Berkshire Focus and Dreyfus Opportunistic
Assuming the 90 days horizon Berkshire Focus is expected to generate 2.47 times more return on investment than Dreyfus Opportunistic. However, Berkshire Focus is 2.47 times more volatile than Dreyfus Opportunistic Midcap. It trades about 0.09 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 1,366 in Berkshire Focus on August 29, 2024 and sell it today you would earn a total of 1,705 from holding Berkshire Focus or generate 124.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Focus vs. Dreyfus Opportunistic Midcap
Performance |
| Timeline |
| Berkshire Focus |
| Dreyfus Opportunistic |
Berkshire Focus and Dreyfus Opportunistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Focus and Dreyfus Opportunistic
The main advantage of trading using opposite Berkshire Focus and Dreyfus Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Focus 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.| Berkshire Focus vs. Red Oak Technology | Berkshire Focus vs. Firsthand Technology Opportunities | Berkshire Focus vs. Morgan Stanley Multi | Berkshire Focus vs. Internet Ultrasector Profund |
| Dreyfus Opportunistic vs. Blackrock Financial Institutions | Dreyfus Opportunistic vs. Gabelli Global Financial | Dreyfus Opportunistic vs. Angel Oak Financial | Dreyfus Opportunistic vs. Icon Financial Fund |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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