Correlation Between Dreyfus High and Dreyfus Bond
Can any of the company-specific risk be diversified away by investing in both Dreyfus High and Dreyfus 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 High and Dreyfus Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus High Yield and Dreyfus Bond Market, you can compare the effects of market volatilities on Dreyfus High and Dreyfus 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 High with a short position of Dreyfus Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus High and Dreyfus Bond.
Diversification Opportunities for Dreyfus High and Dreyfus Bond
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus High Yield and Dreyfus Bond Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Bond Market and Dreyfus High 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 High Yield are associated (or correlated) with Dreyfus Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Bond Market has no effect on the direction of Dreyfus High i.e., Dreyfus High and Dreyfus Bond go up and down completely randomly.
Pair Corralation between Dreyfus High and Dreyfus Bond
Assuming the 90 days horizon Dreyfus High Yield is expected to generate 0.52 times more return on investment than Dreyfus Bond. However, Dreyfus High Yield is 1.92 times less risky than Dreyfus Bond. It trades about 0.41 of its potential returns per unit of risk. Dreyfus Bond Market is currently generating about 0.13 per unit of risk. If you would invest 1,101 in Dreyfus High Yield on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Dreyfus High Yield or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dreyfus High Yield vs. Dreyfus Bond Market
Performance |
| Timeline |
| Dreyfus High Yield |
| Dreyfus Bond Market |
Dreyfus High and Dreyfus Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus High and Dreyfus Bond
The main advantage of trading using opposite Dreyfus High and Dreyfus Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus High position performs unexpectedly, Dreyfus 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 Dreyfus Bond will offset losses from the drop in Dreyfus Bond's long position.| Dreyfus High vs. Nuveen High Yield | Dreyfus High vs. Nuveen High Yield | Dreyfus High vs. SCOR PK | Dreyfus High vs. Morningstar Unconstrained Allocation |
| Dreyfus Bond vs. SCOR PK | Dreyfus Bond vs. Morningstar Unconstrained Allocation | Dreyfus Bond vs. Via Renewables | Dreyfus Bond vs. Bondbloxx ETF Trust |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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