Correlation Between International Stock and Dreyfus Global
Can any of the company-specific risk be diversified away by investing in both International Stock and Dreyfus Global 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 Global 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 Global Real, you can compare the effects of market volatilities on International Stock and Dreyfus Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Stock and Dreyfus Global.
Diversification Opportunities for International Stock and Dreyfus Global
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Dreyfus is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding International Stock Fund and Dreyfus Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Global Real 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Global Real has no effect on the direction of International Stock i.e., International Stock and Dreyfus Global go up and down completely randomly.
Pair Corralation between International Stock and Dreyfus Global
Assuming the 90 days horizon International Stock Fund is expected to generate 1.95 times more return on investment than Dreyfus Global. However, International Stock is 1.95 times more volatile than Dreyfus Global Real. It trades about 0.03 of its potential returns per unit of risk. Dreyfus Global Real is currently generating about 0.05 per unit of risk. If you would invest 2,141 in International Stock Fund on September 3, 2024 and sell it today you would earn a total of 281.00 from holding International Stock Fund or generate 13.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Stock Fund vs. Dreyfus Global Real
Performance |
| Timeline |
| International Stock |
| Dreyfus Global Real |
International Stock and Dreyfus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Stock and Dreyfus Global
The main advantage of trading using opposite International Stock and Dreyfus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Stock position performs unexpectedly, Dreyfus Global 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 Global will offset losses from the drop in Dreyfus Global's long position.| International Stock vs. Federated Pennsylvania Municipal | International Stock vs. Artisan High Income | International Stock vs. Limited Term Tax | International Stock vs. Ab Impact Municipal |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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