Correlation Between Dreyfus Worldwide and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Dreyfus Worldwide and Emerging Markets 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 Worldwide and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Worldwide Growth and Emerging Markets Fund, you can compare the effects of market volatilities on Dreyfus Worldwide and Emerging Markets 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 Worldwide with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Worldwide and Emerging Markets.
Diversification Opportunities for Dreyfus Worldwide and Emerging Markets
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dreyfus and Emerging is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Worldwide Growth and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets and Dreyfus Worldwide 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 Worldwide Growth are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Dreyfus Worldwide i.e., Dreyfus Worldwide and Emerging Markets go up and down completely randomly.
Pair Corralation between Dreyfus Worldwide and Emerging Markets
Assuming the 90 days horizon Dreyfus Worldwide Growth is expected to generate 0.91 times more return on investment than Emerging Markets. However, Dreyfus Worldwide Growth is 1.1 times less risky than Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. Emerging Markets Fund is currently generating about 0.04 per unit of risk. If you would invest 6,234 in Dreyfus Worldwide Growth on August 24, 2024 and sell it today you would earn a total of 1,184 from holding Dreyfus Worldwide Growth or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Worldwide Growth vs. Emerging Markets Fund
Performance |
| Timeline |
| Dreyfus Worldwide Growth |
| Emerging Markets |
Dreyfus Worldwide and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Worldwide and Emerging Markets
The main advantage of trading using opposite Dreyfus Worldwide and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Worldwide position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Dreyfus Worldwide vs. Emerging Markets Fund | Dreyfus Worldwide vs. International Growth Fund | Dreyfus Worldwide vs. Heritage Fund Investor | Dreyfus Worldwide vs. Select Fund Investor |
| Emerging Markets vs. Heritage Fund Investor | Emerging Markets vs. Real Estate Fund | Emerging Markets vs. Global Growth Fund | Emerging Markets vs. Utilities Fund Investor |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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