Correlation Between Dreyfus Midcap and Dreyfus Opportunistic
Can any of the company-specific risk be diversified away by investing in both Dreyfus Midcap and Dreyfus Opportunistic 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 Midcap and Dreyfus Opportunistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Midcap Index and Dreyfus Opportunistic Small, you can compare the effects of market volatilities on Dreyfus Midcap and Dreyfus Opportunistic 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 Midcap with a short position of Dreyfus Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Midcap and Dreyfus Opportunistic.
Diversification Opportunities for Dreyfus Midcap and Dreyfus Opportunistic
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Dreyfus and Dreyfus is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Midcap Index and Dreyfus Opportunistic Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Opportunistic and Dreyfus Midcap 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 Midcap Index are associated (or correlated) with Dreyfus Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Opportunistic has no effect on the direction of Dreyfus Midcap i.e., Dreyfus Midcap and Dreyfus Opportunistic go up and down completely randomly.
Pair Corralation between Dreyfus Midcap and Dreyfus Opportunistic
Assuming the 90 days horizon Dreyfus Midcap Index is expected to generate 0.99 times more return on investment than Dreyfus Opportunistic. However, Dreyfus Midcap Index is 1.01 times less risky than Dreyfus Opportunistic. It trades about -0.12 of its potential returns per unit of risk. Dreyfus Opportunistic Small is currently generating about -0.15 per unit of risk. If you would invest 2,672 in Dreyfus Midcap Index on January 14, 2025 and sell it today you would lose (221.00) from holding Dreyfus Midcap Index or give up 8.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Midcap Index vs. Dreyfus Opportunistic Small
Performance |
| Timeline |
| Dreyfus Midcap Index |
| Dreyfus Opportunistic |
Dreyfus Midcap and Dreyfus Opportunistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Midcap and Dreyfus Opportunistic
The main advantage of trading using opposite Dreyfus Midcap and Dreyfus Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Midcap position performs unexpectedly, Dreyfus Opportunistic 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 Dreyfus Opportunistic will offset losses from the drop in Dreyfus Opportunistic's long position.| Dreyfus Midcap vs. Dreyfus Smallcap Stock | Dreyfus Midcap vs. Bny Mellon Emerging | Dreyfus Midcap vs. Champlain Mid Cap |
| Dreyfus Opportunistic vs. Dreyfus Opportunistic Small | Dreyfus Opportunistic vs. Fidelity Advisor Large | Dreyfus Opportunistic vs. Fidelity Advisor Large |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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