Correlation Between Dreyfus Appreciation and Alger Health
Can any of the company-specific risk be diversified away by investing in both Dreyfus Appreciation and Alger Health 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 Appreciation and Alger Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Appreciation Fund and Alger Health Sciences, you can compare the effects of market volatilities on Dreyfus Appreciation and Alger Health 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 Appreciation with a short position of Alger Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Appreciation and Alger Health.
Diversification Opportunities for Dreyfus Appreciation and Alger Health
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dreyfus and Alger is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Appreciation Fund and Alger Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Health Sciences and Dreyfus Appreciation 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 Appreciation Fund are associated (or correlated) with Alger Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Health Sciences has no effect on the direction of Dreyfus Appreciation i.e., Dreyfus Appreciation and Alger Health go up and down completely randomly.
Pair Corralation between Dreyfus Appreciation and Alger Health
Assuming the 90 days horizon Dreyfus Appreciation Fund is expected to generate 0.8 times more return on investment than Alger Health. However, Dreyfus Appreciation Fund is 1.24 times less risky than Alger Health. It trades about 0.29 of its potential returns per unit of risk. Alger Health Sciences is currently generating about 0.14 per unit of risk. If you would invest 4,392 in Dreyfus Appreciation Fund on September 1, 2024 and sell it today you would earn a total of 189.00 from holding Dreyfus Appreciation Fund or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dreyfus Appreciation Fund vs. Alger Health Sciences
Performance |
| Timeline |
| Dreyfus Appreciation |
| Alger Health Sciences |
Dreyfus Appreciation and Alger Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Appreciation and Alger Health
The main advantage of trading using opposite Dreyfus Appreciation and Alger Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Appreciation position performs unexpectedly, Alger Health 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 Alger Health will offset losses from the drop in Alger Health's long position.| Dreyfus Appreciation vs. Dreyfus High Yield | Dreyfus Appreciation vs. Dreyfusthe Boston Pany | Dreyfus Appreciation vs. Dreyfus International Bond | Dreyfus Appreciation vs. Dreyfus International Bond |
| Alger Health vs. Small Cap Equity | Alger Health vs. Us Strategic Equity | Alger Health vs. Ultra Short Fixed Income | Alger Health vs. Calamos Global Equity |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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