Correlation Between Dreyfus Active and Dreyfus Research
Can any of the company-specific risk be diversified away by investing in both Dreyfus Active and Dreyfus Research 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 Research 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 Research Growth, you can compare the effects of market volatilities on Dreyfus Active and Dreyfus Research 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 Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Active and Dreyfus Research.
Diversification Opportunities for Dreyfus Active and Dreyfus Research
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Active Midcap and Dreyfus Research Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Research Growth 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 Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Research Growth has no effect on the direction of Dreyfus Active i.e., Dreyfus Active and Dreyfus Research go up and down completely randomly.
Pair Corralation between Dreyfus Active and Dreyfus Research
Assuming the 90 days horizon Dreyfus Active is expected to generate 1.19 times less return on investment than Dreyfus Research. But when comparing it to its historical volatility, Dreyfus Active Midcap is 1.31 times less risky than Dreyfus Research. It trades about 0.11 of its potential returns per unit of risk. Dreyfus Research Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,737 in Dreyfus Research Growth on August 28, 2024 and sell it today you would earn a total of 437.00 from holding Dreyfus Research Growth or generate 25.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Active Midcap vs. Dreyfus Research Growth
Performance |
| Timeline |
| Dreyfus Active Midcap |
| Dreyfus Research Growth |
Dreyfus Active and Dreyfus Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Active and Dreyfus Research
The main advantage of trading using opposite Dreyfus Active and Dreyfus Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Active position performs unexpectedly, Dreyfus Research 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 Research will offset losses from the drop in Dreyfus Research's long position.| Dreyfus Active vs. Janus Global Technology | Dreyfus Active vs. Icon Information Technology | Dreyfus Active vs. Blackrock Science Technology | Dreyfus Active vs. Pgim Jennison Technology |
| Dreyfus Research vs. Vanguard Information Technology | Dreyfus Research vs. Technology Ultrasector Profund | Dreyfus Research vs. Science Technology Fund | Dreyfus Research vs. Icon Information Technology |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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