Correlation Between Dreyfus Natural and High Yield
Can any of the company-specific risk be diversified away by investing in both Dreyfus Natural and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Dreyfus Natural and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Natural and High Yield.
Diversification Opportunities for Dreyfus Natural and High Yield
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dreyfus and HIGH is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Natural Resources and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Dreyfus Natural i.e., Dreyfus Natural and High Yield go up and down completely randomly.
Pair Corralation between Dreyfus Natural and High Yield
Assuming the 90 days horizon Dreyfus Natural Resources is expected to under-perform the High Yield. In addition to that, Dreyfus Natural is 5.91 times more volatile than High Yield Fund. It trades about -0.16 of its total potential returns per unit of risk. High Yield Fund is currently generating about 0.07 per unit of volatility. If you would invest 324.00 in High Yield Fund on November 28, 2024 and sell it today you would earn a total of 1.00 from holding High Yield Fund or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Natural Resources vs. High Yield Fund
Performance |
| Timeline |
| Dreyfus Natural Resources |
| High Yield Fund |
Dreyfus Natural and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Natural and High Yield
The main advantage of trading using opposite Dreyfus Natural and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Natural position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Dreyfus Natural vs. Old Westbury Small | Dreyfus Natural vs. United Kingdom Small | Dreyfus Natural vs. Champlain Small | Dreyfus Natural vs. Glg Intl Small |
| High Yield vs. College Retirement Equities | High Yield vs. Wealthbuilder Moderate Balanced | High Yield vs. Fidelity Managed Retirement | High Yield vs. Blackrock Retirement Income |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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