Correlation Between Dreyfus Opportunistic and Dreyfus Floating
Can any of the company-specific risk be diversified away by investing in both Dreyfus Opportunistic and Dreyfus Floating 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 Opportunistic and Dreyfus Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Opportunistic Small and Dreyfus Floating Rate, you can compare the effects of market volatilities on Dreyfus Opportunistic and Dreyfus Floating 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 Opportunistic with a short position of Dreyfus Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Opportunistic and Dreyfus Floating.
Diversification Opportunities for Dreyfus Opportunistic and Dreyfus Floating
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Opportunistic Small and Dreyfus Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Floating Rate and Dreyfus Opportunistic 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 Opportunistic Small are associated (or correlated) with Dreyfus Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Floating Rate has no effect on the direction of Dreyfus Opportunistic i.e., Dreyfus Opportunistic and Dreyfus Floating go up and down completely randomly.
Pair Corralation between Dreyfus Opportunistic and Dreyfus Floating
Assuming the 90 days horizon Dreyfus Opportunistic Small is expected to generate 16.41 times more return on investment than Dreyfus Floating. However, Dreyfus Opportunistic is 16.41 times more volatile than Dreyfus Floating Rate. It trades about 0.05 of its potential returns per unit of risk. Dreyfus Floating Rate is currently generating about 0.54 per unit of risk. If you would invest 2,929 in Dreyfus Opportunistic Small on September 3, 2024 and sell it today you would earn a total of 486.00 from holding Dreyfus Opportunistic Small or generate 16.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Opportunistic Small vs. Dreyfus Floating Rate
Performance |
| Timeline |
| Dreyfus Opportunistic |
| Dreyfus Floating Rate |
Dreyfus Opportunistic and Dreyfus Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Opportunistic and Dreyfus Floating
The main advantage of trading using opposite Dreyfus Opportunistic and Dreyfus Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Opportunistic position performs unexpectedly, Dreyfus Floating 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 Floating will offset losses from the drop in Dreyfus Floating's long position.The idea behind Dreyfus Opportunistic Small and Dreyfus Floating Rate 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.
| Dreyfus Floating vs. Oppenheimer Senior Floating | Dreyfus Floating vs. Oppenheimer Senior Floating | Dreyfus Floating vs. Floating Rate Fund | Dreyfus Floating vs. Floating Rate Fund |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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