Correlation Between Dreyfus High and Dreyfus Strategic
Can any of the company-specific risk be diversified away by investing in both Dreyfus High and Dreyfus Strategic 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 Dreyfus Strategic 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 Dreyfus Strategic Value, you can compare the effects of market volatilities on Dreyfus High and Dreyfus Strategic 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 Dreyfus Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus High and Dreyfus Strategic.
Diversification Opportunities for Dreyfus High and Dreyfus Strategic
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 High Yield and Dreyfus Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Strategic Value 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 Dreyfus Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Strategic Value has no effect on the direction of Dreyfus High i.e., Dreyfus High and Dreyfus Strategic go up and down completely randomly.
Pair Corralation between Dreyfus High and Dreyfus Strategic
Assuming the 90 days horizon Dreyfus High is expected to generate 1.93 times less return on investment than Dreyfus Strategic. But when comparing it to its historical volatility, Dreyfus High Yield is 2.47 times less risky than Dreyfus Strategic. It trades about 0.12 of its potential returns per unit of risk. Dreyfus Strategic Value is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,688 in Dreyfus Strategic Value on September 2, 2024 and sell it today you would earn a total of 1,423 from holding Dreyfus Strategic Value or generate 38.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus High Yield vs. Dreyfus Strategic Value
Performance |
| Timeline |
| Dreyfus High Yield |
| Dreyfus Strategic Value |
Dreyfus High and Dreyfus Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus High and Dreyfus Strategic
The main advantage of trading using opposite Dreyfus High and Dreyfus Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus High position performs unexpectedly, Dreyfus Strategic 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 Strategic will offset losses from the drop in Dreyfus Strategic's long position.| Dreyfus High vs. Ab Bond Inflation | Dreyfus High vs. Ab Bond Inflation | Dreyfus High vs. Fidelity Advisor 529 | Dreyfus High vs. Asg Managed Futures |
| Dreyfus Strategic vs. Dreyfusstandish Global Fixed | Dreyfus Strategic vs. Dreyfusstandish Global Fixed | Dreyfus Strategic vs. Dreyfus High Yield | Dreyfus Strategic vs. Dreyfus High Yield |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |