Correlation Between Dreyfus Equity and Dreyfus Floating
Can any of the company-specific risk be diversified away by investing in both Dreyfus Equity 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 Equity 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 Equity Income and Dreyfus Floating Rate, you can compare the effects of market volatilities on Dreyfus Equity 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 Equity with a short position of Dreyfus Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Equity and Dreyfus Floating.
Diversification Opportunities for Dreyfus Equity and Dreyfus Floating
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Equity Income 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 Equity 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 Equity Income 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 Equity i.e., Dreyfus Equity and Dreyfus Floating go up and down completely randomly.
Pair Corralation between Dreyfus Equity and Dreyfus Floating
Assuming the 90 days horizon Dreyfus Equity Income is expected to generate 6.96 times more return on investment than Dreyfus Floating. However, Dreyfus Equity is 6.96 times more volatile than Dreyfus Floating Rate. It trades about 0.28 of its potential returns per unit of risk. Dreyfus Floating Rate is currently generating about 0.51 per unit of risk. If you would invest 3,140 in Dreyfus Equity Income on September 1, 2024 and sell it today you would earn a total of 124.00 from holding Dreyfus Equity Income or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dreyfus Equity Income vs. Dreyfus Floating Rate
Performance |
| Timeline |
| Dreyfus Equity Income |
| Dreyfus Floating Rate |
Dreyfus Equity and Dreyfus Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Equity and Dreyfus Floating
The main advantage of trading using opposite Dreyfus Equity and Dreyfus Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Equity 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.| Dreyfus Equity vs. Dreyfusstandish Global Fixed | Dreyfus Equity vs. Dreyfusstandish Global Fixed | Dreyfus Equity vs. Dreyfus High Yield | Dreyfus Equity vs. Dreyfus High Yield |
| Dreyfus Floating vs. Dreyfusstandish Global Fixed | Dreyfus Floating vs. Dreyfusstandish Global Fixed | Dreyfus Floating vs. Dreyfus High Yield | Dreyfus Floating 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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