Correlation Between Dreyfus Bond and L Abbett
Can any of the company-specific risk be diversified away by investing in both Dreyfus Bond and L Abbett 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 Bond and L Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Bond Market and L Abbett Growth, you can compare the effects of market volatilities on Dreyfus Bond and L Abbett 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 Bond with a short position of L Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Bond and L Abbett.
Diversification Opportunities for Dreyfus Bond and L Abbett
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dreyfus and LGLSX is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Bond Market and L Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett Growth and Dreyfus Bond 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 Bond Market are associated (or correlated) with L Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Abbett Growth has no effect on the direction of Dreyfus Bond i.e., Dreyfus Bond and L Abbett go up and down completely randomly.
Pair Corralation between Dreyfus Bond and L Abbett
Assuming the 90 days horizon Dreyfus Bond is expected to generate 19.01 times less return on investment than L Abbett. But when comparing it to its historical volatility, Dreyfus Bond Market is 3.37 times less risky than L Abbett. It trades about 0.02 of its potential returns per unit of risk. L Abbett Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,599 in L Abbett Growth on October 12, 2024 and sell it today you would earn a total of 2,150 from holding L Abbett Growth or generate 82.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Bond Market vs. L Abbett Growth
Performance |
| Timeline |
| Dreyfus Bond Market |
| L Abbett Growth |
Dreyfus Bond and L Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Bond and L Abbett
The main advantage of trading using opposite Dreyfus Bond and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Bond position performs unexpectedly, L Abbett 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 L Abbett will offset losses from the drop in L Abbett's long position.| Dreyfus Bond vs. First Eagle Gold | Dreyfus Bond vs. The Gold Bullion | Dreyfus Bond vs. Gabelli Gold Fund | Dreyfus Bond vs. Oppenheimer Gold Special |
| L Abbett vs. Alphacentric Hedged Market | L Abbett vs. Locorr Market Trend | L Abbett vs. Ashmore Emerging Markets | L Abbett vs. Dreyfus Bond Market |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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