Correlation Between Dreyfus Natural and Federated Floating
Can any of the company-specific risk be diversified away by investing in both Dreyfus Natural and Federated Floating 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 Federated Floating 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 Federated Floating Rate, you can compare the effects of market volatilities on Dreyfus Natural and Federated Floating 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 Federated Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Natural and Federated Floating.
Diversification Opportunities for Dreyfus Natural and Federated Floating
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreyfus and Federated is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Natural Resources and Federated Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Floating Rate 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 Federated Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Floating Rate has no effect on the direction of Dreyfus Natural i.e., Dreyfus Natural and Federated Floating go up and down completely randomly.
Pair Corralation between Dreyfus Natural and Federated Floating
Assuming the 90 days horizon Dreyfus Natural is expected to generate 10.62 times less return on investment than Federated Floating. In addition to that, Dreyfus Natural is 9.1 times more volatile than Federated Floating Rate. It trades about 0.0 of its total potential returns per unit of risk. Federated Floating Rate is currently generating about 0.17 per unit of volatility. If you would invest 844.00 in Federated Floating Rate on September 1, 2024 and sell it today you would earn a total of 24.00 from holding Federated Floating Rate or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Natural Resources vs. Federated Floating Rate
Performance |
| Timeline |
| Dreyfus Natural Resources |
| Federated Floating Rate |
Dreyfus Natural and Federated Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Natural and Federated Floating
The main advantage of trading using opposite Dreyfus Natural and Federated Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Natural position performs unexpectedly, Federated Floating 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 Federated Floating will offset losses from the drop in Federated Floating's long position.| Dreyfus Natural vs. Aqr Large Cap | Dreyfus Natural vs. Virtus Nfj Large Cap | Dreyfus Natural vs. Touchstone Large Cap | Dreyfus Natural vs. Americafirst Large Cap |
| Federated Floating vs. Federated Emerging Market | Federated Floating vs. Federated Mdt All | Federated Floating vs. Federated Mdt Balanced | Federated Floating vs. Federated Global Allocation |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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