Correlation Between Dreyfus Natural and Baron Health
Can any of the company-specific risk be diversified away by investing in both Dreyfus Natural and Baron Health 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 Baron Health 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 Baron Health Care, you can compare the effects of market volatilities on Dreyfus Natural and Baron Health 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 Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Natural and Baron Health.
Diversification Opportunities for Dreyfus Natural and Baron Health
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dreyfus and Baron is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Natural Resources and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care 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 Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Dreyfus Natural i.e., Dreyfus Natural and Baron Health go up and down completely randomly.
Pair Corralation between Dreyfus Natural and Baron Health
Assuming the 90 days horizon Dreyfus Natural Resources is expected to under-perform the Baron Health. In addition to that, Dreyfus Natural is 2.15 times more volatile than Baron Health Care. It trades about -0.19 of its total potential returns per unit of risk. Baron Health Care is currently generating about -0.17 per unit of volatility. If you would invest 2,097 in Baron Health Care on September 13, 2024 and sell it today you would lose (71.00) from holding Baron Health Care or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Natural Resources vs. Baron Health Care
Performance |
| Timeline |
| Dreyfus Natural Resources |
| Baron Health Care |
Dreyfus Natural and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Natural and Baron Health
The main advantage of trading using opposite Dreyfus Natural and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Natural position performs unexpectedly, Baron Health 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 Baron Health will offset losses from the drop in Baron Health's long position.| Dreyfus Natural vs. Rationalpier 88 Convertible | Dreyfus Natural vs. Calamos Dynamic Convertible | Dreyfus Natural vs. Gabelli Convertible And | Dreyfus Natural vs. Advent Claymore Convertible |
| Baron Health vs. Guidemark Large Cap | Baron Health vs. Old Westbury Large | Baron Health vs. Alternative Asset Allocation | Baron Health vs. Pace Large Growth |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |