Correlation Between Dreyfus New and Oil Gas
Can any of the company-specific risk be diversified away by investing in both Dreyfus New and Oil Gas 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 New and Oil Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus New York and Oil Gas Ultrasector, you can compare the effects of market volatilities on Dreyfus New and Oil Gas 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 New with a short position of Oil Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus New and Oil Gas.
Diversification Opportunities for Dreyfus New and Oil Gas
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dreyfus and Oil is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus New York and Oil Gas Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Gas Ultrasector and Dreyfus New 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 New York are associated (or correlated) with Oil Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Gas Ultrasector has no effect on the direction of Dreyfus New i.e., Dreyfus New and Oil Gas go up and down completely randomly.
Pair Corralation between Dreyfus New and Oil Gas
Assuming the 90 days horizon Dreyfus New York is expected to generate 0.12 times more return on investment than Oil Gas. However, Dreyfus New York is 8.64 times less risky than Oil Gas. It trades about 0.13 of its potential returns per unit of risk. Oil Gas Ultrasector is currently generating about -0.24 per unit of risk. If you would invest 1,368 in Dreyfus New York on September 14, 2024 and sell it today you would earn a total of 6.00 from holding Dreyfus New York or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus New York vs. Oil Gas Ultrasector
Performance |
| Timeline |
| Dreyfus New York |
| Oil Gas Ultrasector |
Dreyfus New and Oil Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus New and Oil Gas
The main advantage of trading using opposite Dreyfus New and Oil Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus New position performs unexpectedly, Oil Gas 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 Oil Gas will offset losses from the drop in Oil Gas' long position.| Dreyfus New vs. Oil Gas Ultrasector | Dreyfus New vs. Tortoise Energy Independence | Dreyfus New vs. Dreyfus Natural Resources | Dreyfus New vs. Energy Basic Materials |
| Oil Gas vs. Oil Gas Ultrasector | Oil Gas vs. Ultramid Cap Profund Ultramid Cap | Oil Gas vs. Precious Metals Ultrasector | Oil Gas vs. Real Estate Ultrasector |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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