Correlation Between Dreyfus Strategic and World Energy
Can any of the company-specific risk be diversified away by investing in both Dreyfus Strategic and World Energy 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 Dreyfus Strategic and World Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Strategic Value and World Energy Fund, you can compare the effects of market volatilities on Dreyfus Strategic and World Energy 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 Dreyfus Strategic with a short position of World Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Strategic and World Energy.
Diversification Opportunities for Dreyfus Strategic and World Energy
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreyfus and World is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Strategic Value and World Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Energy and Dreyfus Strategic 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 Dreyfus Strategic Value are associated (or correlated) with World Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Energy has no effect on the direction of Dreyfus Strategic i.e., Dreyfus Strategic and World Energy go up and down completely randomly.
Pair Corralation between Dreyfus Strategic and World Energy
Assuming the 90 days horizon Dreyfus Strategic Value is expected to under-perform the World Energy. In addition to that, Dreyfus Strategic is 1.6 times more volatile than World Energy Fund. It trades about -0.26 of its total potential returns per unit of risk. World Energy Fund is currently generating about -0.11 per unit of volatility. If you would invest 1,507 in World Energy Fund on September 12, 2024 and sell it today you would lose (38.00) from holding World Energy Fund or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Strategic Value vs. World Energy Fund
Performance |
| Timeline |
| Dreyfus Strategic Value |
| World Energy |
Dreyfus Strategic and World Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Strategic and World Energy
The main advantage of trading using opposite Dreyfus Strategic and World Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Strategic position performs unexpectedly, World Energy 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 World Energy will offset losses from the drop in World Energy's long position.| Dreyfus Strategic vs. Sarofim Equity | Dreyfus Strategic vs. Artisan Select Equity | Dreyfus Strategic vs. Gmo Global Equity | Dreyfus Strategic vs. Qs International Equity |
| World Energy vs. Aam Select Income | World Energy vs. Arrow Managed Futures | World Energy vs. Rbc Microcap Value | World Energy vs. Volumetric Fund Volumetric |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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