Correlation Between Dreyfus Gnma and Hartford Equity
Can any of the company-specific risk be diversified away by investing in both Dreyfus Gnma and Hartford Equity 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 Gnma and Hartford Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Gnma Fund and The Hartford Equity, you can compare the effects of market volatilities on Dreyfus Gnma and Hartford Equity 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 Gnma with a short position of Hartford Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Gnma and Hartford Equity.
Diversification Opportunities for Dreyfus Gnma and Hartford Equity
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dreyfus and Hartford is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Gnma Fund and The Hartford Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Equity and Dreyfus Gnma 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 Gnma Fund are associated (or correlated) with Hartford Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Equity has no effect on the direction of Dreyfus Gnma i.e., Dreyfus Gnma and Hartford Equity go up and down completely randomly.
Pair Corralation between Dreyfus Gnma and Hartford Equity
Assuming the 90 days horizon Dreyfus Gnma is expected to generate 2.87 times less return on investment than Hartford Equity. But when comparing it to its historical volatility, Dreyfus Gnma Fund is 1.73 times less risky than Hartford Equity. It trades about 0.04 of its potential returns per unit of risk. The Hartford Equity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,944 in The Hartford Equity on September 2, 2024 and sell it today you would earn a total of 353.00 from holding The Hartford Equity or generate 18.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Gnma Fund vs. The Hartford Equity
Performance |
| Timeline |
| Dreyfus Gnma |
| Hartford Equity |
Dreyfus Gnma and Hartford Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Gnma and Hartford Equity
The main advantage of trading using opposite Dreyfus Gnma and Hartford Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Gnma position performs unexpectedly, Hartford Equity 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 Hartford Equity will offset losses from the drop in Hartford Equity's long position.| Dreyfus Gnma vs. Dreyfusstandish Global Fixed | Dreyfus Gnma vs. Dreyfusstandish Global Fixed | Dreyfus Gnma vs. Dreyfus High Yield | Dreyfus Gnma vs. Dreyfus High Yield |
| Hartford Equity vs. The Hartford Dividend | Hartford Equity vs. The Hartford Total | Hartford Equity vs. The Hartford International | Hartford Equity vs. The Hartford Midcap |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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