Correlation Between Dreyfus Active and Dreyfus Strategic
Can any of the company-specific risk be diversified away by investing in both Dreyfus Active and Dreyfus Strategic 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 Active and Dreyfus Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Active Midcap and Dreyfus Strategic Value, you can compare the effects of market volatilities on Dreyfus Active and Dreyfus Strategic 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 Active with a short position of Dreyfus Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Active and Dreyfus Strategic.
Diversification Opportunities for Dreyfus Active and Dreyfus Strategic
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 Active Midcap and Dreyfus Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Strategic Value and Dreyfus Active 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 Active Midcap are associated (or correlated) with Dreyfus Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Strategic Value has no effect on the direction of Dreyfus Active i.e., Dreyfus Active and Dreyfus Strategic go up and down completely randomly.
Pair Corralation between Dreyfus Active and Dreyfus Strategic
Assuming the 90 days horizon Dreyfus Active is expected to generate 1.11 times less return on investment than Dreyfus Strategic. In addition to that, Dreyfus Active is 1.23 times more volatile than Dreyfus Strategic Value. It trades about 0.11 of its total potential returns per unit of risk. Dreyfus Strategic Value is currently generating about 0.15 per unit of volatility. If you would invest 3,928 in Dreyfus Strategic Value on September 2, 2024 and sell it today you would earn a total of 1,183 from holding Dreyfus Strategic Value or generate 30.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Active Midcap vs. Dreyfus Strategic Value
Performance |
| Timeline |
| Dreyfus Active Midcap |
| Dreyfus Strategic Value |
Dreyfus Active and Dreyfus Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Active and Dreyfus Strategic
The main advantage of trading using opposite Dreyfus Active and Dreyfus Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Active position performs unexpectedly, Dreyfus Strategic 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 Strategic will offset losses from the drop in Dreyfus Strategic's long position.| Dreyfus Active vs. California High Yield Municipal | Dreyfus Active vs. Pace High Yield | Dreyfus Active vs. Ab Global Risk | Dreyfus Active vs. Siit High Yield |
| Dreyfus Strategic vs. Dreyfusstandish Global Fixed | Dreyfus Strategic vs. Dreyfusstandish Global Fixed | Dreyfus Strategic vs. Dreyfus High Yield | Dreyfus Strategic vs. Dreyfus High Yield |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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