Correlation Between Dreyfus Government and State Street
Can any of the company-specific risk be diversified away by investing in both Dreyfus Government and State Street 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 State Street 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 State Street Equity, you can compare the effects of market volatilities on Dreyfus Government and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Government and State Street.
Diversification Opportunities for Dreyfus Government and State Street
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreyfus and State is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Government Cash and State Street Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Equity 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Equity has no effect on the direction of Dreyfus Government i.e., Dreyfus Government and State Street go up and down completely randomly.
Pair Corralation between Dreyfus Government and State Street
If you would invest 43,146 in State Street Equity on September 1, 2024 and sell it today you would earn a total of 2,530 from holding State Street Equity or generate 5.86% 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. State Street Equity
Performance |
| Timeline |
| Dreyfus Government Cash |
| State Street Equity |
Dreyfus Government and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Government and State Street
The main advantage of trading using opposite Dreyfus Government and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Government position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street'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 |
| State Street vs. Us Government Securities | State Street vs. Dreyfus Government Cash | State Street vs. Us Government Securities | State Street vs. Franklin Government Money |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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