Correlation Between Baron Health and Dreyfus Short
Can any of the company-specific risk be diversified away by investing in both Baron Health and Dreyfus Short 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 Baron Health and Dreyfus Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Health Care and Dreyfus Short Intermediate, you can compare the effects of market volatilities on Baron Health and Dreyfus Short 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 Baron Health with a short position of Dreyfus Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Dreyfus Short.
Diversification Opportunities for Baron Health and Dreyfus Short
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baron and Dreyfus is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Dreyfus Short Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Short Interm and Baron Health 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 Baron Health Care are associated (or correlated) with Dreyfus Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Short Interm has no effect on the direction of Baron Health i.e., Baron Health and Dreyfus Short go up and down completely randomly.
Pair Corralation between Baron Health and Dreyfus Short
Assuming the 90 days horizon Baron Health Care is expected to under-perform the Dreyfus Short. In addition to that, Baron Health is 19.65 times more volatile than Dreyfus Short Intermediate. It trades about -0.17 of its total potential returns per unit of risk. Dreyfus Short Intermediate is currently generating about 0.32 per unit of volatility. If you would invest 1,278 in Dreyfus Short Intermediate on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Dreyfus Short Intermediate or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Dreyfus Short Intermediate
Performance |
| Timeline |
| Baron Health Care |
| Dreyfus Short Interm |
Baron Health and Dreyfus Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Dreyfus Short
The main advantage of trading using opposite Baron Health and Dreyfus Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Dreyfus Short 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 Short will offset losses from the drop in Dreyfus Short's long position.| Baron Health vs. Guidemark Large Cap | Baron Health vs. Old Westbury Large | Baron Health vs. Alternative Asset Allocation | Baron Health vs. Pace Large Growth |
| Dreyfus Short vs. Dreyfus High Yield | Dreyfus Short vs. Dreyfusthe Boston Pany | Dreyfus Short vs. Dreyfus International Bond | Dreyfus Short 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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