Correlation Between Dreyfus Active and Dreyfus Appreciation
Can any of the company-specific risk be diversified away by investing in both Dreyfus Active and Dreyfus Appreciation 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 Appreciation 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 Appreciation Fund, you can compare the effects of market volatilities on Dreyfus Active and Dreyfus Appreciation 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 Appreciation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Active and Dreyfus Appreciation.
Diversification Opportunities for Dreyfus Active and Dreyfus Appreciation
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DREYFUS and Dreyfus is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Active Midcap and Dreyfus Appreciation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Appreciation 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 Appreciation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Appreciation has no effect on the direction of Dreyfus Active i.e., Dreyfus Active and Dreyfus Appreciation go up and down completely randomly.
Pair Corralation between Dreyfus Active and Dreyfus Appreciation
Assuming the 90 days horizon Dreyfus Active Midcap is expected to under-perform the Dreyfus Appreciation. In addition to that, Dreyfus Active is 1.05 times more volatile than Dreyfus Appreciation Fund. It trades about -0.23 of its total potential returns per unit of risk. Dreyfus Appreciation Fund is currently generating about -0.03 per unit of volatility. If you would invest 4,022 in Dreyfus Appreciation Fund on December 1, 2024 and sell it today you would lose (23.00) from holding Dreyfus Appreciation Fund or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dreyfus Active Midcap vs. Dreyfus Appreciation Fund
Performance |
| Timeline |
| Dreyfus Active Midcap |
| Dreyfus Appreciation |
Dreyfus Active and Dreyfus Appreciation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Active and Dreyfus Appreciation
The main advantage of trading using opposite Dreyfus Active and Dreyfus Appreciation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Active position performs unexpectedly, Dreyfus Appreciation 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 Appreciation will offset losses from the drop in Dreyfus Appreciation's long position.| Dreyfus Active vs. John Hancock Government | Dreyfus Active vs. Prudential California Muni | Dreyfus Active vs. Intermediate Term Tax Free Bond | Dreyfus Active vs. Us Government Securities |
| Dreyfus Appreciation vs. Wells Fargo Advantage | Dreyfus Appreciation vs. Global Gold Fund | Dreyfus Appreciation vs. Gold And Precious | Dreyfus Appreciation vs. Oppenheimer Gold Special |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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