Correlation Between Dreyfus International and Dreyfus Opportunistic
Can any of the company-specific risk be diversified away by investing in both Dreyfus International and Dreyfus Opportunistic 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 Opportunistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus International Stock and Dreyfus Opportunistic Midcap, you can compare the effects of market volatilities on Dreyfus International and Dreyfus Opportunistic 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 Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus International and Dreyfus Opportunistic.
Diversification Opportunities for Dreyfus International and Dreyfus Opportunistic
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dreyfus and Dreyfus is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus International Stock and Dreyfus Opportunistic Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Opportunistic 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 Stock are associated (or correlated) with Dreyfus Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Opportunistic has no effect on the direction of Dreyfus International i.e., Dreyfus International and Dreyfus Opportunistic go up and down completely randomly.
Pair Corralation between Dreyfus International and Dreyfus Opportunistic
Assuming the 90 days horizon Dreyfus International Stock is expected to generate 0.27 times more return on investment than Dreyfus Opportunistic. However, Dreyfus International Stock is 3.69 times less risky than Dreyfus Opportunistic. It trades about 0.15 of its potential returns per unit of risk. Dreyfus Opportunistic Midcap is currently generating about -0.25 per unit of risk. If you would invest 1,993 in Dreyfus International Stock on September 18, 2024 and sell it today you would earn a total of 33.00 from holding Dreyfus International Stock or generate 1.66% 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 Stock vs. Dreyfus Opportunistic Midcap
Performance |
| Timeline |
| Dreyfus International |
| Dreyfus Opportunistic |
Dreyfus International and Dreyfus Opportunistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus International and Dreyfus Opportunistic
The main advantage of trading using opposite Dreyfus International and Dreyfus Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus International position performs unexpectedly, Dreyfus Opportunistic 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 Opportunistic will offset losses from the drop in Dreyfus Opportunistic's long position.| Dreyfus International vs. Dreyfus Smallcap Stock | Dreyfus International vs. Dreyfus Midcap Index | Dreyfus International vs. Dreyfus Bond Market | Dreyfus International vs. Dreyfus Sp 500 |
| Dreyfus Opportunistic vs. Dreyfus Smallcap Stock | Dreyfus Opportunistic vs. Dreyfus Sp 500 | Dreyfus Opportunistic vs. Dreyfus International Stock | Dreyfus Opportunistic vs. Dreyfus Institutional Sp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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