Correlation Between Dreyfus Bond and Marsico Global

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Can any of the company-specific risk be diversified away by investing in both Dreyfus Bond and Marsico Global 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 Marsico Global 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 Marsico Global, you can compare the effects of market volatilities on Dreyfus Bond and Marsico Global 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 Marsico Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Bond and Marsico Global.

Diversification Opportunities for Dreyfus Bond and Marsico Global

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Dreyfus and Marsico is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Bond Market and Marsico Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsico Global 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 Marsico Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsico Global has no effect on the direction of Dreyfus Bond i.e., Dreyfus Bond and Marsico Global go up and down completely randomly.

Pair Corralation between Dreyfus Bond and Marsico Global

Assuming the 90 days horizon Dreyfus Bond is expected to generate 11.91 times less return on investment than Marsico Global. But when comparing it to its historical volatility, Dreyfus Bond Market is 4.81 times less risky than Marsico Global. It trades about 0.08 of its potential returns per unit of risk. Marsico Global is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2,636  in Marsico Global on November 4, 2024 and sell it today you would earn a total of  143.00  from holding Marsico Global or generate 5.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Dreyfus Bond Market  vs.  Marsico Global

 Performance 
       Timeline  
Dreyfus Bond Market 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Dreyfus Bond Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dreyfus Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Marsico Global 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Marsico Global are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Marsico Global may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Dreyfus Bond and Marsico Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dreyfus Bond and Marsico Global

The main advantage of trading using opposite Dreyfus Bond and Marsico Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Bond position performs unexpectedly, Marsico Global 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 Marsico Global will offset losses from the drop in Marsico Global's long position.
The idea behind Dreyfus Bond Market and Marsico Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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