Correlation Between Dreyfus/standish and Capital World
Can any of the company-specific risk be diversified away by investing in both Dreyfus/standish and Capital World 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 Capital World 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 Capital World Bond, you can compare the effects of market volatilities on Dreyfus/standish and Capital World 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 Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus/standish and Capital World.
Diversification Opportunities for Dreyfus/standish and Capital World
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus/standish and Capital is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfusstandish Global Fixed and Capital World Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Bond 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 Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Bond has no effect on the direction of Dreyfus/standish i.e., Dreyfus/standish and Capital World go up and down completely randomly.
Pair Corralation between Dreyfus/standish and Capital World
Assuming the 90 days horizon Dreyfusstandish Global Fixed is expected to generate 0.41 times more return on investment than Capital World. However, Dreyfusstandish Global Fixed is 2.41 times less risky than Capital World. It trades about 0.41 of its potential returns per unit of risk. Capital World Bond is currently generating about -0.01 per unit of risk. If you would invest 1,956 in Dreyfusstandish Global Fixed on September 4, 2024 and sell it today you would earn a total of 28.00 from holding Dreyfusstandish Global Fixed or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dreyfusstandish Global Fixed vs. Capital World Bond
Performance |
| Timeline |
| Dreyfusstandish Global |
| Capital World Bond |
Dreyfus/standish and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus/standish and Capital World
The main advantage of trading using opposite Dreyfus/standish and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus/standish position performs unexpectedly, Capital World 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 Capital World will offset losses from the drop in Capital World's long position.| Dreyfus/standish vs. Dreyfusstandish Global Fixed | Dreyfus/standish vs. Dreyfus High Yield | Dreyfus/standish vs. Dreyfus High Yield | Dreyfus/standish vs. Dreyfus High Yield |
| Capital World vs. Columbia Real Estate | Capital World vs. Pender Real Estate | Capital World vs. Commonwealth Real Estate | Capital World vs. Columbia Real Estate |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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