Correlation Between Dreyfus Government and American Beacon
Can any of the company-specific risk be diversified away by investing in both Dreyfus Government and American Beacon 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 Government and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Government Cash and American Beacon Large, you can compare the effects of market volatilities on Dreyfus Government and American Beacon 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 Government with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Government and American Beacon.
Diversification Opportunities for Dreyfus Government and American Beacon
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreyfus and American is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Government Cash and American Beacon Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Large and Dreyfus Government 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 Government Cash are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Large has no effect on the direction of Dreyfus Government i.e., Dreyfus Government and American Beacon go up and down completely randomly.
Pair Corralation between Dreyfus Government and American Beacon
If you would invest 2,997 in American Beacon Large on September 1, 2024 and sell it today you would earn a total of 154.00 from holding American Beacon Large or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Government Cash vs. American Beacon Large
Performance |
| Timeline |
| Dreyfus Government Cash |
| American Beacon Large |
Dreyfus Government and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Government and American Beacon
The main advantage of trading using opposite Dreyfus Government and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Government position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Dreyfus Government vs. Rbc Global Opportunities | Dreyfus Government vs. Morgan Stanley Global | Dreyfus Government vs. Mirova Global Green | Dreyfus Government vs. Wasatch Global Opportunities |
| American Beacon vs. Western Asset Municipal | American Beacon vs. Aam Select Income | American Beacon vs. Materials Portfolio Fidelity | American Beacon vs. Rbb Fund |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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