Correlation Between Dreyfus Natural and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Dreyfus Natural and Baillie Gifford 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 Dreyfus Natural and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Natural Resources and Baillie Gifford Emerging, you can compare the effects of market volatilities on Dreyfus Natural and Baillie Gifford 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 Dreyfus Natural with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Natural and Baillie Gifford.
Diversification Opportunities for Dreyfus Natural and Baillie Gifford
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dreyfus and Baillie is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Natural Resources and Baillie Gifford Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Emerging and Dreyfus Natural 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 Dreyfus Natural Resources are associated (or correlated) with Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford Emerging has no effect on the direction of Dreyfus Natural i.e., Dreyfus Natural and Baillie Gifford go up and down completely randomly.
Pair Corralation between Dreyfus Natural and Baillie Gifford
Assuming the 90 days horizon Dreyfus Natural Resources is expected to generate 1.27 times more return on investment than Baillie Gifford. However, Dreyfus Natural is 1.27 times more volatile than Baillie Gifford Emerging. It trades about 0.24 of its potential returns per unit of risk. Baillie Gifford Emerging is currently generating about -0.17 per unit of risk. If you would invest 4,165 in Dreyfus Natural Resources on September 4, 2024 and sell it today you would earn a total of 224.00 from holding Dreyfus Natural Resources or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dreyfus Natural Resources vs. Baillie Gifford Emerging
Performance |
| Timeline |
| Dreyfus Natural Resources |
| Baillie Gifford Emerging |
Dreyfus Natural and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Natural and Baillie Gifford
The main advantage of trading using opposite Dreyfus Natural and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Natural position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Dreyfus Natural vs. Jennison Natural Resources | Dreyfus Natural vs. Icon Natural Resources | Dreyfus Natural vs. Tortoise Energy Independence | Dreyfus Natural vs. Clearbridge Energy Mlp |
| Baillie Gifford vs. Oil Gas Ultrasector | Baillie Gifford vs. World Energy Fund | Baillie Gifford vs. Dreyfus Natural Resources | Baillie Gifford vs. Gmo Resources |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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