Correlation Between Dreyfus Active and Vanguard Small-cap
Can any of the company-specific risk be diversified away by investing in both Dreyfus Active and Vanguard Small-cap 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 Vanguard Small-cap 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 Vanguard Small Cap Growth, you can compare the effects of market volatilities on Dreyfus Active and Vanguard Small-cap 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 Vanguard Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Active and Vanguard Small-cap.
Diversification Opportunities for Dreyfus Active and Vanguard Small-cap
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dreyfus and Vanguard is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Active Midcap and Vanguard Small Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap 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 Vanguard Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of Dreyfus Active i.e., Dreyfus Active and Vanguard Small-cap go up and down completely randomly.
Pair Corralation between Dreyfus Active and Vanguard Small-cap
Assuming the 90 days horizon Dreyfus Active Midcap is expected to generate 0.73 times more return on investment than Vanguard Small-cap. However, Dreyfus Active Midcap is 1.36 times less risky than Vanguard Small-cap. It trades about 0.02 of its potential returns per unit of risk. Vanguard Small Cap Growth is currently generating about -0.05 per unit of risk. If you would invest 5,063 in Dreyfus Active Midcap on November 30, 2024 and sell it today you would earn a total of 32.00 from holding Dreyfus Active Midcap or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Active Midcap vs. Vanguard Small Cap Growth
Performance |
| Timeline |
| Dreyfus Active Midcap |
| Vanguard Small Cap |
Dreyfus Active and Vanguard Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Active and Vanguard Small-cap
The main advantage of trading using opposite Dreyfus Active and Vanguard Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Active position performs unexpectedly, Vanguard Small-cap 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 Vanguard Small-cap will offset losses from the drop in Vanguard Small-cap's long position.| Dreyfus Active vs. Flexible Bond Portfolio | Dreyfus Active vs. Ms Global Fixed | Dreyfus Active vs. Touchstone Ultra Short | Dreyfus Active vs. Rbc Bluebay Emerging |
| Vanguard Small-cap vs. Federated Government Income | Vanguard Small-cap vs. Us Government Securities | Vanguard Small-cap vs. Us Government Securities | Vanguard Small-cap vs. Franklin Adjustable Government |
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 Stocks Directory module to find actively traded stocks across global markets.
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