Correlation Between Dreyfus Government and Arbitrage Fund
Can any of the company-specific risk be diversified away by investing in both Dreyfus Government and Arbitrage 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 Government and Arbitrage Fund 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 The Arbitrage Fund, you can compare the effects of market volatilities on Dreyfus Government and Arbitrage 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 Government with a short position of Arbitrage Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Government and Arbitrage Fund.
Diversification Opportunities for Dreyfus Government and Arbitrage Fund
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dreyfus and Arbitrage is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Government Cash and The Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Fund 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 Arbitrage Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Fund has no effect on the direction of Dreyfus Government i.e., Dreyfus Government and Arbitrage Fund go up and down completely randomly.
Pair Corralation between Dreyfus Government and Arbitrage Fund
If you would invest 1,347 in The Arbitrage Fund on September 19, 2024 and sell it today you would earn a total of 5.00 from holding The Arbitrage Fund or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dreyfus Government Cash vs. The Arbitrage Fund
Performance |
| Timeline |
| Dreyfus Government Cash |
| Arbitrage Fund |
Dreyfus Government and Arbitrage Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Government and Arbitrage Fund
The main advantage of trading using opposite Dreyfus Government and Arbitrage Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Government position performs unexpectedly, Arbitrage 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 Arbitrage Fund will offset losses from the drop in Arbitrage Fund's long position.| Dreyfus Government vs. T Rowe Price | Dreyfus Government vs. Vy Baron Growth | Dreyfus Government vs. Qs Growth Fund | Dreyfus Government vs. Tfa Alphagen Growth |
| Arbitrage Fund vs. Us Government Securities | Arbitrage Fund vs. Dreyfus Government Cash | Arbitrage Fund vs. Wesmark Government Bond | Arbitrage Fund vs. Franklin Adjustable Government |
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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