Correlation Between Dreyfus Active and Dynamic Total

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Can any of the company-specific risk be diversified away by investing in both Dreyfus Active and Dynamic Total 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 Dynamic Total 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 Dynamic Total Return, you can compare the effects of market volatilities on Dreyfus Active and Dynamic Total 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 Dynamic Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Active and Dynamic Total.

Diversification Opportunities for Dreyfus Active and Dynamic Total

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between DREYFUS and Dynamic is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Active Midcap and Dynamic Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Total Return 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 Dynamic Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Total Return has no effect on the direction of Dreyfus Active i.e., Dreyfus Active and Dynamic Total go up and down completely randomly.

Pair Corralation between Dreyfus Active and Dynamic Total

Assuming the 90 days horizon Dreyfus Active Midcap is expected to under-perform the Dynamic Total. In addition to that, Dreyfus Active is 2.92 times more volatile than Dynamic Total Return. It trades about -0.24 of its total potential returns per unit of risk. Dynamic Total Return is currently generating about -0.14 per unit of volatility. If you would invest  1,438  in Dynamic Total Return on November 29, 2024 and sell it today you would lose (11.00) from holding Dynamic Total Return or give up 0.76% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Dreyfus Active Midcap  vs.  Dynamic Total Return

 Performance 
       Timeline  
Dreyfus Active Midcap 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Dreyfus Active Midcap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.
Dynamic Total Return 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Dynamic Total Return has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dynamic Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dreyfus Active and Dynamic Total Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dreyfus Active and Dynamic Total

The main advantage of trading using opposite Dreyfus Active and Dynamic Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Active position performs unexpectedly, Dynamic Total 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 Dynamic Total will offset losses from the drop in Dynamic Total's long position.
The idea behind Dreyfus Active Midcap and Dynamic Total Return pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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