Correlation Between Dreyfus/standish and California Bond
Can any of the company-specific risk be diversified away by investing in both Dreyfus/standish and California Bond 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 California Bond 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 California Bond Fund, you can compare the effects of market volatilities on Dreyfus/standish and California Bond 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 California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus/standish and California Bond.
Diversification Opportunities for Dreyfus/standish and California Bond
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreyfus/standish and California is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfusstandish Global Fixed and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California 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 California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of Dreyfus/standish i.e., Dreyfus/standish and California Bond go up and down completely randomly.
Pair Corralation between Dreyfus/standish and California Bond
Assuming the 90 days horizon Dreyfusstandish Global Fixed is expected to generate 1.01 times more return on investment than California Bond. However, Dreyfus/standish is 1.01 times more volatile than California Bond Fund. It trades about 0.07 of its potential returns per unit of risk. California Bond Fund is currently generating about 0.07 per unit of risk. If you would invest 1,811 in Dreyfusstandish Global Fixed on September 3, 2024 and sell it today you would earn a total of 173.00 from holding Dreyfusstandish Global Fixed or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfusstandish Global Fixed vs. California Bond Fund
Performance |
| Timeline |
| Dreyfusstandish Global |
| California Bond |
Dreyfus/standish and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus/standish and California Bond
The main advantage of trading using opposite Dreyfus/standish and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus/standish position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond's long position.| Dreyfus/standish vs. American Century Etf | Dreyfus/standish vs. Mutual Of America | Dreyfus/standish vs. Hennessy Nerstone Mid | Dreyfus/standish vs. Vanguard Small Cap Value |
| California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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