Correlation Between Dreyfus Fund and International Stock
Can any of the company-specific risk be diversified away by investing in both Dreyfus Fund and International Stock 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 Fund and International Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Fund Inc and International Stock Fund, you can compare the effects of market volatilities on Dreyfus Fund and International Stock 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 Fund with a short position of International Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Fund and International Stock.
Diversification Opportunities for Dreyfus Fund and International Stock
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dreyfus and International is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Fund Inc and International Stock Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Stock and Dreyfus Fund 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 Fund Inc are associated (or correlated) with International Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Stock has no effect on the direction of Dreyfus Fund i.e., Dreyfus Fund and International Stock go up and down completely randomly.
Pair Corralation between Dreyfus Fund and International Stock
Assuming the 90 days horizon Dreyfus Fund Inc is expected to generate 0.99 times more return on investment than International Stock. However, Dreyfus Fund Inc is 1.01 times less risky than International Stock. It trades about 0.13 of its potential returns per unit of risk. International Stock Fund is currently generating about 0.01 per unit of risk. If you would invest 1,412 in Dreyfus Fund Inc on August 31, 2024 and sell it today you would earn a total of 709.00 from holding Dreyfus Fund Inc or generate 50.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Fund Inc vs. International Stock Fund
Performance |
| Timeline |
| Dreyfus Fund |
| International Stock |
Dreyfus Fund and International Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Fund and International Stock
The main advantage of trading using opposite Dreyfus Fund and International Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Fund position performs unexpectedly, International Stock 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 International Stock will offset losses from the drop in International Stock's long position.| Dreyfus Fund vs. Europacific Growth Fund | Dreyfus Fund vs. Washington Mutual Investors | Dreyfus Fund vs. Capital World Growth | Dreyfus Fund vs. HUMANA INC |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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