Correlation Between Dreyfus International and Dreyfus Active
Can any of the company-specific risk be diversified away by investing in both Dreyfus International and Dreyfus Active 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 Active 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 Active Midcap, you can compare the effects of market volatilities on Dreyfus International and Dreyfus Active 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 Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus International and Dreyfus Active.
Diversification Opportunities for Dreyfus International and Dreyfus Active
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dreyfus and Dreyfus is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus International Bond and Dreyfus Active Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Active Midcap 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 Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Active Midcap has no effect on the direction of Dreyfus International i.e., Dreyfus International and Dreyfus Active go up and down completely randomly.
Pair Corralation between Dreyfus International and Dreyfus Active
Assuming the 90 days horizon Dreyfus International is expected to generate 92.17 times less return on investment than Dreyfus Active. But when comparing it to its historical volatility, Dreyfus International Bond is 1.9 times less risky than Dreyfus Active. It trades about 0.01 of its potential returns per unit of risk. Dreyfus Active Midcap is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 6,260 in Dreyfus Active Midcap on September 1, 2024 and sell it today you would earn a total of 618.00 from holding Dreyfus Active Midcap or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus International Bond vs. Dreyfus Active Midcap
Performance |
| Timeline |
| Dreyfus International |
| Dreyfus Active Midcap |
Dreyfus International and Dreyfus Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus International and Dreyfus Active
The main advantage of trading using opposite Dreyfus International and Dreyfus Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus International position performs unexpectedly, Dreyfus Active 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 Active will offset losses from the drop in Dreyfus Active's long position.| Dreyfus International vs. Dreyfus High Yield | Dreyfus International vs. Dreyfusthe Boston Pany | Dreyfus International vs. Dreyfus International Bond | Dreyfus International vs. Dreyfus International Equity |
| Dreyfus Active vs. Massmutual Premier Diversified | Dreyfus Active vs. Lord Abbett Diversified | Dreyfus Active vs. Oppenheimer International Diversified | Dreyfus Active vs. Adams Diversified Equity |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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