Correlation Between Dreyfus Government and Commodity Return
Can any of the company-specific risk be diversified away by investing in both Dreyfus Government and Commodity Return 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 Commodity Return 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 Commodity Return Strategy, you can compare the effects of market volatilities on Dreyfus Government and Commodity Return 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 Commodity Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Government and Commodity Return.
Diversification Opportunities for Dreyfus Government and Commodity Return
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreyfus and Commodity is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Government Cash and Commodity Return Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodity Return Strategy 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 Commodity Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodity Return Strategy has no effect on the direction of Dreyfus Government i.e., Dreyfus Government and Commodity Return go up and down completely randomly.
Pair Corralation between Dreyfus Government and Commodity Return
Assuming the 90 days horizon Dreyfus Government Cash is expected to generate 0.37 times more return on investment than Commodity Return. However, Dreyfus Government Cash is 2.69 times less risky than Commodity Return. It trades about 0.06 of its potential returns per unit of risk. Commodity Return Strategy is currently generating about -0.03 per unit of risk. If you would invest 98.00 in Dreyfus Government Cash on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Dreyfus Government Cash or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Dreyfus Government Cash vs. Commodity Return Strategy
Performance |
| Timeline |
| Dreyfus Government Cash |
| Commodity Return Strategy |
Dreyfus Government and Commodity Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Government and Commodity Return
The main advantage of trading using opposite Dreyfus Government and Commodity Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Government position performs unexpectedly, Commodity Return 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 Commodity Return will offset losses from the drop in Commodity Return'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 |
| Commodity Return vs. Credit Suisse Floating | Commodity Return vs. Credit Suisse Floating | Commodity Return vs. Credit Suisse Modity | Commodity Return vs. Credit Suisse Modity |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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