Correlation Between Dreyfus International and Dreyfus Fund
Can any of the company-specific risk be diversified away by investing in both Dreyfus International and Dreyfus Fund 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 Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus International Equity and Dreyfus Fund Inc, you can compare the effects of market volatilities on Dreyfus International and Dreyfus Fund 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 Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus International and Dreyfus Fund.
Diversification Opportunities for Dreyfus International and Dreyfus Fund
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dreyfus and Dreyfus is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus International Equity and Dreyfus Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Fund 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 Equity are associated (or correlated) with Dreyfus Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Fund has no effect on the direction of Dreyfus International i.e., Dreyfus International and Dreyfus Fund go up and down completely randomly.
Pair Corralation between Dreyfus International and Dreyfus Fund
Assuming the 90 days horizon Dreyfus International is expected to generate 4.65 times less return on investment than Dreyfus Fund. But when comparing it to its historical volatility, Dreyfus International Equity is 1.05 times less risky than Dreyfus Fund. It trades about 0.03 of its potential returns per unit of risk. Dreyfus Fund Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,412 in Dreyfus Fund Inc on August 31, 2024 and sell it today you would earn a total of 709.00 from holding Dreyfus Fund Inc or generate 50.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus International Equity vs. Dreyfus Fund Inc
Performance |
| Timeline |
| Dreyfus International |
| Dreyfus Fund |
Dreyfus International and Dreyfus Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus International and Dreyfus Fund
The main advantage of trading using opposite Dreyfus International and Dreyfus Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus International position performs unexpectedly, Dreyfus Fund 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 Fund will offset losses from the drop in Dreyfus Fund's long position.| Dreyfus International vs. Ab Small Cap | Dreyfus International vs. Victory Rs Small | Dreyfus International vs. Us Small Cap | Dreyfus International vs. Tax Managed Mid Small |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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