Correlation Between Black Oak and Dreyfus Active
Can any of the company-specific risk be diversified away by investing in both Black Oak and Dreyfus Active 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 Black Oak and Dreyfus Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Oak Emerging and Dreyfus Active Midcap, you can compare the effects of market volatilities on Black Oak and Dreyfus Active 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 Black Oak with a short position of Dreyfus Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Oak and Dreyfus Active.
Diversification Opportunities for Black Oak and Dreyfus Active
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Black and Dreyfus is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Black Oak Emerging and Dreyfus Active Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Active Midcap and Black Oak 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 Black Oak Emerging are associated (or correlated) with Dreyfus Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Active Midcap has no effect on the direction of Black Oak i.e., Black Oak and Dreyfus Active go up and down completely randomly.
Pair Corralation between Black Oak and Dreyfus Active
Assuming the 90 days horizon Black Oak is expected to generate 5.35 times less return on investment than Dreyfus Active. In addition to that, Black Oak is 1.23 times more volatile than Dreyfus Active Midcap. It trades about 0.05 of its total potential returns per unit of risk. Dreyfus Active Midcap is currently generating about 0.34 per unit of volatility. If you would invest 5,423 in Dreyfus Active Midcap on August 31, 2024 and sell it today you would earn a total of 436.00 from holding Dreyfus Active Midcap or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Black Oak Emerging vs. Dreyfus Active Midcap
Performance |
| Timeline |
| Black Oak Emerging |
| Dreyfus Active Midcap |
Black Oak and Dreyfus Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Oak and Dreyfus Active
The main advantage of trading using opposite Black Oak and Dreyfus Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Oak position performs unexpectedly, Dreyfus Active 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 Active will offset losses from the drop in Dreyfus Active's long position.| Black Oak vs. Red Oak Technology | Black Oak vs. Pin Oak Equity | Black Oak vs. White Oak Select | Black Oak vs. Berkshire Focus |
| Dreyfus Active vs. Angel Oak Multi Strategy | Dreyfus Active vs. Black Oak Emerging | Dreyfus Active vs. Franklin Emerging Market | Dreyfus Active vs. Shelton Emerging Markets |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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