Correlation Between International Stock and Dreyfus Active
Can any of the company-specific risk be diversified away by investing in both International Stock and Dreyfus Active 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 International Stock and Dreyfus Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Stock Fund and Dreyfus Active Midcap, you can compare the effects of market volatilities on International Stock and Dreyfus Active 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 International Stock with a short position of Dreyfus Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Stock and Dreyfus Active.
Diversification Opportunities for International Stock and Dreyfus Active
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and DREYFUS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding International Stock Fund and Dreyfus Active Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Active Midcap and International Stock 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 International Stock Fund are associated (or correlated) with Dreyfus Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Active Midcap has no effect on the direction of International Stock i.e., International Stock and Dreyfus Active go up and down completely randomly.
Pair Corralation between International Stock and Dreyfus Active
Assuming the 90 days horizon International Stock Fund is expected to generate 1.29 times more return on investment than Dreyfus Active. However, International Stock is 1.29 times more volatile than Dreyfus Active Midcap. It trades about -0.12 of its potential returns per unit of risk. Dreyfus Active Midcap is currently generating about -0.23 per unit of risk. If you would invest 2,399 in International Stock Fund on December 1, 2024 and sell it today you would lose (63.00) from holding International Stock Fund or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Stock Fund vs. Dreyfus Active Midcap
Performance |
| Timeline |
| International Stock |
| Dreyfus Active Midcap |
International Stock and Dreyfus Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Stock and Dreyfus Active
The main advantage of trading using opposite International Stock and Dreyfus Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Stock position performs unexpectedly, Dreyfus Active 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 Active will offset losses from the drop in Dreyfus Active's long position.| International Stock vs. Alpine Ultra Short | International Stock vs. Us Government Securities | International Stock vs. Old Westbury Municipal | International Stock vs. Bbh Intermediate Municipal |
| Dreyfus Active vs. John Hancock Government | Dreyfus Active vs. Prudential California Muni | Dreyfus Active vs. Intermediate Term Tax Free Bond | Dreyfus Active vs. Us Government Securities |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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