Correlation Between Dreyfus Opportunistic and American Beacon
Can any of the company-specific risk be diversified away by investing in both Dreyfus Opportunistic and American Beacon 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 Opportunistic and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Opportunistic Midcap and American Beacon Balanced, you can compare the effects of market volatilities on Dreyfus Opportunistic and American Beacon 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 Opportunistic with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Opportunistic and American Beacon.
Diversification Opportunities for Dreyfus Opportunistic and American Beacon
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dreyfus and American is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Opportunistic Midcap and American Beacon Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Balanced and Dreyfus Opportunistic 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 Opportunistic Midcap are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Balanced has no effect on the direction of Dreyfus Opportunistic i.e., Dreyfus Opportunistic and American Beacon go up and down completely randomly.
Pair Corralation between Dreyfus Opportunistic and American Beacon
Assuming the 90 days horizon Dreyfus Opportunistic Midcap is expected to under-perform the American Beacon. In addition to that, Dreyfus Opportunistic is 1.96 times more volatile than American Beacon Balanced. It trades about -0.02 of its total potential returns per unit of risk. American Beacon Balanced is currently generating about 0.05 per unit of volatility. If you would invest 1,631 in American Beacon Balanced on September 13, 2024 and sell it today you would earn a total of 5.00 from holding American Beacon Balanced or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Opportunistic Midcap vs. American Beacon Balanced
Performance |
| Timeline |
| Dreyfus Opportunistic |
| American Beacon Balanced |
Dreyfus Opportunistic and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Opportunistic and American Beacon
The main advantage of trading using opposite Dreyfus Opportunistic and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Opportunistic position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Dreyfus Opportunistic vs. Applied Finance Explorer | Dreyfus Opportunistic vs. Lord Abbett Small | Dreyfus Opportunistic vs. Palm Valley Capital | Dreyfus Opportunistic vs. Ab Small Cap |
| American Beacon vs. Virtus Multi Sector Short | American Beacon vs. Kentucky Tax Free Short To Medium | American Beacon vs. Prudential Short Duration | American Beacon vs. Cmg Ultra Short |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |