Correlation Between Dreyfus Fund and Dreyfus Active
Can any of the company-specific risk be diversified away by investing in both Dreyfus Fund and Dreyfus Active 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 Dreyfus Active 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 Dreyfus Active Midcap, you can compare the effects of market volatilities on Dreyfus Fund and Dreyfus Active 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 Dreyfus Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Fund and Dreyfus Active.
Diversification Opportunities for Dreyfus Fund and Dreyfus Active
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Fund Inc and Dreyfus Active Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Active Midcap 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 Dreyfus Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Active Midcap has no effect on the direction of Dreyfus Fund i.e., Dreyfus Fund and Dreyfus Active go up and down completely randomly.
Pair Corralation between Dreyfus Fund and Dreyfus Active
Assuming the 90 days horizon Dreyfus Fund is expected to generate 1.23 times less return on investment than Dreyfus Active. In addition to that, Dreyfus Fund is 1.05 times more volatile than Dreyfus Active Midcap. It trades about 0.11 of its total potential returns per unit of risk. Dreyfus Active Midcap is currently generating about 0.14 per unit of volatility. If you would invest 5,858 in Dreyfus Active Midcap on September 1, 2024 and sell it today you would earn a total of 985.00 from holding Dreyfus Active Midcap or generate 16.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Fund Inc vs. Dreyfus Active Midcap
Performance |
| Timeline |
| Dreyfus Fund |
| Dreyfus Active Midcap |
Dreyfus Fund and Dreyfus Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Fund and Dreyfus Active
The main advantage of trading using opposite Dreyfus Fund and Dreyfus Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Fund position performs unexpectedly, Dreyfus Active 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 Active will offset losses from the drop in Dreyfus Active's long position.| Dreyfus Fund vs. Dreyfus Active Midcap | Dreyfus Fund vs. Dreyfus Gnma Fund | Dreyfus Fund vs. Dreyfus Research Growth | Dreyfus Fund vs. Dreyfus International Stock |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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