Correlation Between Barings Active and Dreyfus Short
Can any of the company-specific risk be diversified away by investing in both Barings Active 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 Barings Active and Dreyfus Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Dreyfus Short Intermediate, you can compare the effects of market volatilities on Barings Active 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 Barings Active with a short position of Dreyfus Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Dreyfus Short.
Diversification Opportunities for Barings Active and Dreyfus Short
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Dreyfus is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short 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 Barings Active 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 Barings Active Short 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 Barings Active i.e., Barings Active and Dreyfus Short go up and down completely randomly.
Pair Corralation between Barings Active and Dreyfus Short
Assuming the 90 days horizon Barings Active Short is expected to generate 1.77 times more return on investment than Dreyfus Short. However, Barings Active is 1.77 times more volatile than Dreyfus Short Intermediate. It trades about 0.21 of its potential returns per unit of risk. Dreyfus Short Intermediate is currently generating about 0.16 per unit of risk. If you would invest 833.00 in Barings Active Short on September 12, 2024 and sell it today you would earn a total of 93.00 from holding Barings Active Short or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Dreyfus Short Intermediate
Performance |
| Timeline |
| Barings Active Short |
| Dreyfus Short Interm |
Barings Active and Dreyfus Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Dreyfus Short
The main advantage of trading using opposite Barings Active and Dreyfus Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active 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.| Barings Active vs. SCOR PK | Barings Active vs. Morningstar Unconstrained Allocation | Barings Active vs. Via Renewables | Barings Active vs. Bondbloxx ETF Trust |
| Dreyfus Short vs. Vanguard Limited Term Tax Exempt | Dreyfus Short vs. Vanguard Limited Term Tax Exempt | Dreyfus Short vs. Vanguard Short Term Tax Exempt | Dreyfus Short vs. Vanguard Short Term Tax Exempt |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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