Correlation Between Dreyfus Technology and Sit Large
Can any of the company-specific risk be diversified away by investing in both Dreyfus Technology and Sit Large 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 Technology and Sit Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Technology Growth and Sit Large Cap, you can compare the effects of market volatilities on Dreyfus Technology and Sit Large 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 Technology with a short position of Sit Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Technology and Sit Large.
Diversification Opportunities for Dreyfus Technology and Sit Large
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus and Sit is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Technology Growth and Sit Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Large Cap and Dreyfus Technology 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 Technology Growth are associated (or correlated) with Sit Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Large Cap has no effect on the direction of Dreyfus Technology i.e., Dreyfus Technology and Sit Large go up and down completely randomly.
Pair Corralation between Dreyfus Technology and Sit Large
Assuming the 90 days horizon Dreyfus Technology Growth is expected to generate 1.44 times more return on investment than Sit Large. However, Dreyfus Technology is 1.44 times more volatile than Sit Large Cap. It trades about 0.09 of its potential returns per unit of risk. Sit Large Cap is currently generating about 0.1 per unit of risk. If you would invest 5,369 in Dreyfus Technology Growth on September 2, 2024 and sell it today you would earn a total of 2,619 from holding Dreyfus Technology Growth or generate 48.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Technology Growth vs. Sit Large Cap
Performance |
| Timeline |
| Dreyfus Technology Growth |
| Sit Large Cap |
Dreyfus Technology and Sit Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Technology and Sit Large
The main advantage of trading using opposite Dreyfus Technology and Sit Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Technology position performs unexpectedly, Sit Large 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 Sit Large will offset losses from the drop in Sit Large's long position.| Dreyfus Technology vs. Veea Inc | Dreyfus Technology vs. VHAI | Dreyfus Technology vs. VivoPower International PLC | Dreyfus Technology vs. WEBTOON Entertainment Common |
| Sit Large vs. Fidelity Small Cap | Sit Large vs. Fpa Queens Road | Sit Large vs. Royce Opportunity Fund | Sit Large vs. Ultramid Cap Profund Ultramid Cap |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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