Correlation Between Dreyfus/standish and Western Asset
Can any of the company-specific risk be diversified away by investing in both Dreyfus/standish and Western Asset 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/standish and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfusstandish Global Fixed and Western Asset Diversified, you can compare the effects of market volatilities on Dreyfus/standish and Western Asset 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/standish with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus/standish and Western Asset.
Diversification Opportunities for Dreyfus/standish and Western Asset
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dreyfus/standish and Western is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfusstandish Global Fixed and Western Asset Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Diversified and Dreyfus/standish 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 Dreyfusstandish Global Fixed are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Diversified has no effect on the direction of Dreyfus/standish i.e., Dreyfus/standish and Western Asset go up and down completely randomly.
Pair Corralation between Dreyfus/standish and Western Asset
Assuming the 90 days horizon Dreyfusstandish Global Fixed is expected to generate 0.63 times more return on investment than Western Asset. However, Dreyfusstandish Global Fixed is 1.58 times less risky than Western Asset. It trades about 0.03 of its potential returns per unit of risk. Western Asset Diversified is currently generating about -0.03 per unit of risk. If you would invest 2,036 in Dreyfusstandish Global Fixed on August 24, 2024 and sell it today you would earn a total of 2.00 from holding Dreyfusstandish Global Fixed or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfusstandish Global Fixed vs. Western Asset Diversified
Performance |
| Timeline |
| Dreyfusstandish Global |
| Western Asset Diversified |
Dreyfus/standish and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus/standish and Western Asset
The main advantage of trading using opposite Dreyfus/standish and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus/standish position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Dreyfus/standish vs. Calamos Global Equity | Dreyfus/standish vs. Balanced Fund Retail | Dreyfus/standish vs. Gmo Global Equity | Dreyfus/standish vs. Us Vector Equity |
| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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