Correlation Between Dreyfus International and Dreyfus High
Can any of the company-specific risk be diversified away by investing in both Dreyfus International and Dreyfus High 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 International and Dreyfus High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus International Bond and Dreyfus High Yield, you can compare the effects of market volatilities on Dreyfus International and Dreyfus High 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 International with a short position of Dreyfus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus International and Dreyfus High.
Diversification Opportunities for Dreyfus International and Dreyfus High
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus International Bond and Dreyfus High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus High Yield and Dreyfus International 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 International Bond are associated (or correlated) with Dreyfus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus High Yield has no effect on the direction of Dreyfus International i.e., Dreyfus International and Dreyfus High go up and down completely randomly.
Pair Corralation between Dreyfus International and Dreyfus High
Assuming the 90 days horizon Dreyfus International Bond is expected to under-perform the Dreyfus High. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dreyfus International Bond is 1.0 times less risky than Dreyfus High. The mutual fund trades about -0.22 of its potential returns per unit of risk. The Dreyfus High Yield is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,096 in Dreyfus High Yield on August 28, 2024 and sell it today you would earn a total of 14.00 from holding Dreyfus High Yield or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus International Bond vs. Dreyfus High Yield
Performance |
| Timeline |
| Dreyfus International |
| Dreyfus High Yield |
Dreyfus International and Dreyfus High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus International and Dreyfus High
The main advantage of trading using opposite Dreyfus International and Dreyfus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus International position performs unexpectedly, Dreyfus High 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 High will offset losses from the drop in Dreyfus High's long position.| Dreyfus International vs. Dreyfusstandish Global Fixed | Dreyfus International vs. Dreyfusstandish Global Fixed | Dreyfus International vs. Dreyfus High Yield | Dreyfus International vs. Dreyfus High Yield |
| Dreyfus High vs. Dreyfusstandish Global Fixed | Dreyfus High vs. Dreyfusstandish Global Fixed | Dreyfus High vs. Dreyfus New Jersey | Dreyfus High vs. Dreyfus International Bond |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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