Correlation Between Dreyfus High and Baron Health
Can any of the company-specific risk be diversified away by investing in both Dreyfus High and Baron Health 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 High and Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus High Yield and Baron Health Care, you can compare the effects of market volatilities on Dreyfus High and Baron Health 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 High with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus High and Baron Health.
Diversification Opportunities for Dreyfus High and Baron Health
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dreyfus and Baron is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus High Yield and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care and Dreyfus High 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 High Yield are associated (or correlated) with Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Dreyfus High i.e., Dreyfus High and Baron Health go up and down completely randomly.
Pair Corralation between Dreyfus High and Baron Health
Assuming the 90 days horizon Dreyfus High Yield is expected to generate 0.25 times more return on investment than Baron Health. However, Dreyfus High Yield is 4.07 times less risky than Baron Health. It trades about 0.21 of its potential returns per unit of risk. Baron Health Care is currently generating about -0.23 per unit of risk. If you would invest 537.00 in Dreyfus High Yield on November 28, 2024 and sell it today you would earn a total of 4.00 from holding Dreyfus High Yield or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus High Yield vs. Baron Health Care
Performance |
| Timeline |
| Dreyfus High Yield |
| Baron Health Care |
Dreyfus High and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus High and Baron Health
The main advantage of trading using opposite Dreyfus High and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus High position performs unexpectedly, Baron Health 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 Baron Health will offset losses from the drop in Baron Health's long position.| Dreyfus High vs. Vanguard Growth Index | Dreyfus High vs. Multimanager Lifestyle Growth | Dreyfus High vs. T Rowe Price | Dreyfus High vs. The Hartford International |
| Baron Health vs. Fidelity Real Estate | Baron Health vs. Voya Real Estate | Baron Health vs. Forum Real Estate | Baron Health vs. Rreef Property Trust |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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