Correlation Between International Stock and Dreyfus International
Can any of the company-specific risk be diversified away by investing in both International Stock and Dreyfus International 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 International 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 International Equity, you can compare the effects of market volatilities on International Stock and Dreyfus International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Stock and Dreyfus International.
Diversification Opportunities for International Stock and Dreyfus International
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between International and Dreyfus is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding International Stock Fund and Dreyfus International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus International has no effect on the direction of International Stock i.e., International Stock and Dreyfus International go up and down completely randomly.
Pair Corralation between International Stock and Dreyfus International
Assuming the 90 days horizon International Stock Fund is expected to under-perform the Dreyfus International. In addition to that, International Stock is 1.17 times more volatile than Dreyfus International Equity. It trades about 0.0 of its total potential returns per unit of risk. Dreyfus International Equity is currently generating about 0.02 per unit of volatility. If you would invest 3,768 in Dreyfus International Equity on August 29, 2024 and sell it today you would earn a total of 94.00 from holding Dreyfus International Equity or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Stock Fund vs. Dreyfus International Equity
Performance |
| Timeline |
| International Stock |
| Dreyfus International |
International Stock and Dreyfus International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Stock and Dreyfus International
The main advantage of trading using opposite International Stock and Dreyfus International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Stock position performs unexpectedly, Dreyfus International 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 International will offset losses from the drop in Dreyfus International's long position.| International Stock vs. Mid Cap Value Profund | International Stock vs. Lord Abbett Small | International Stock vs. Ultrasmall Cap Profund Ultrasmall Cap | International Stock vs. Boston Partners Small |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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