Correlation Between International Stock and Dreyfus Midcap
Can any of the company-specific risk be diversified away by investing in both International Stock and Dreyfus Midcap 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 Midcap 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 Midcap Index, you can compare the effects of market volatilities on International Stock and Dreyfus Midcap 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 Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Stock and Dreyfus Midcap.
Diversification Opportunities for International Stock and Dreyfus Midcap
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and DREYFUS is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding International Stock Fund and Dreyfus Midcap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Midcap Index 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 Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Midcap Index has no effect on the direction of International Stock i.e., International Stock and Dreyfus Midcap go up and down completely randomly.
Pair Corralation between International Stock and Dreyfus Midcap
Assuming the 90 days horizon International Stock Fund is expected to under-perform the Dreyfus Midcap. But the mutual fund apears to be less risky and, when comparing its historical volatility, International Stock Fund is 1.3 times less risky than Dreyfus Midcap. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Dreyfus Midcap Index is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 3,147 in Dreyfus Midcap Index on September 1, 2024 and sell it today you would earn a total of 277.00 from holding Dreyfus Midcap Index or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Stock Fund vs. Dreyfus Midcap Index
Performance |
| Timeline |
| International Stock |
| Dreyfus Midcap Index |
International Stock and Dreyfus Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Stock and Dreyfus Midcap
The main advantage of trading using opposite International Stock and Dreyfus Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Stock position performs unexpectedly, Dreyfus Midcap 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 Midcap will offset losses from the drop in Dreyfus Midcap's long position.| International Stock vs. Dreyfus High Yield | International Stock vs. Dreyfusthe Boston Pany | International Stock vs. Dreyfus International Bond | International Stock vs. Dreyfus International Bond |
| Dreyfus Midcap vs. Dreyfus Smallcap Stock | Dreyfus Midcap vs. Bny Mellon Emerging | Dreyfus Midcap vs. Champlain Mid Cap | Dreyfus Midcap vs. Aquagold International |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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