Correlation Between Dreyfus International and Dreyfus Appreciation
Can any of the company-specific risk be diversified away by investing in both Dreyfus International and Dreyfus Appreciation 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 Appreciation 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 Appreciation Fund, you can compare the effects of market volatilities on Dreyfus International and Dreyfus Appreciation 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 Appreciation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus International and Dreyfus Appreciation.
Diversification Opportunities for Dreyfus International and Dreyfus Appreciation
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dreyfus and Dreyfus is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus International Bond and Dreyfus Appreciation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Appreciation 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 Appreciation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Appreciation has no effect on the direction of Dreyfus International i.e., Dreyfus International and Dreyfus Appreciation go up and down completely randomly.
Pair Corralation between Dreyfus International and Dreyfus Appreciation
Assuming the 90 days horizon Dreyfus International is expected to generate 4.11 times less return on investment than Dreyfus Appreciation. But when comparing it to its historical volatility, Dreyfus International Bond is 1.72 times less risky than Dreyfus Appreciation. It trades about 0.03 of its potential returns per unit of risk. Dreyfus Appreciation Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,178 in Dreyfus Appreciation Fund on September 3, 2024 and sell it today you would earn a total of 403.00 from holding Dreyfus Appreciation Fund or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus International Bond vs. Dreyfus Appreciation Fund
Performance |
| Timeline |
| Dreyfus International |
| Dreyfus Appreciation |
Dreyfus International and Dreyfus Appreciation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus International and Dreyfus Appreciation
The main advantage of trading using opposite Dreyfus International and Dreyfus Appreciation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus International position performs unexpectedly, Dreyfus Appreciation 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 Appreciation will offset losses from the drop in Dreyfus Appreciation's long position.| Dreyfus International vs. Calamos Market Neutral | Dreyfus International vs. Legg Mason Partners | Dreyfus International vs. Ep Emerging Markets | Dreyfus International vs. The Emerging Markets |
| Dreyfus Appreciation vs. Goldman Sachs High | Dreyfus Appreciation vs. Ppm High Yield | Dreyfus Appreciation vs. Pgim High Yield | Dreyfus Appreciation vs. Calvert High Yield |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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