Correlation Between International Stock and Dreyfus Opportunistic
Can any of the company-specific risk be diversified away by investing in both International Stock and Dreyfus Opportunistic 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 Opportunistic 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 Opportunistic Small, you can compare the effects of market volatilities on International Stock and Dreyfus Opportunistic 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 Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Stock and Dreyfus Opportunistic.
Diversification Opportunities for International Stock and Dreyfus Opportunistic
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and Dreyfus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding International Stock Fund and Dreyfus Opportunistic Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Opportunistic 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 Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Opportunistic has no effect on the direction of International Stock i.e., International Stock and Dreyfus Opportunistic go up and down completely randomly.
Pair Corralation between International Stock and Dreyfus Opportunistic
Assuming the 90 days horizon International Stock Fund is expected to generate 0.91 times more return on investment than Dreyfus Opportunistic. However, International Stock Fund is 1.1 times less risky than Dreyfus Opportunistic. It trades about 0.02 of its potential returns per unit of risk. Dreyfus Opportunistic Small is currently generating about -0.17 per unit of risk. If you would invest 2,351 in International Stock Fund on November 29, 2024 and sell it today you would earn a total of 7.00 from holding International Stock Fund or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Stock Fund vs. Dreyfus Opportunistic Small
Performance |
| Timeline |
| International Stock |
| Dreyfus Opportunistic |
International Stock and Dreyfus Opportunistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Stock and Dreyfus Opportunistic
The main advantage of trading using opposite International Stock and Dreyfus Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Stock position performs unexpectedly, Dreyfus Opportunistic 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 Opportunistic will offset losses from the drop in Dreyfus Opportunistic's long position.| International Stock vs. Towpath Technology | International Stock vs. Red Oak Technology | International Stock vs. Allianzgi Technology Fund | International Stock vs. Global Technology Portfolio |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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