Correlation Between Dreyfus/standish and American Mutual
Can any of the company-specific risk be diversified away by investing in both Dreyfus/standish and American Mutual 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/standish and American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfusstandish Global Fixed and American Mutual Fund, you can compare the effects of market volatilities on Dreyfus/standish and American Mutual 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/standish with a short position of American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus/standish and American Mutual.
Diversification Opportunities for Dreyfus/standish and American Mutual
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dreyfus/standish and American is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfusstandish Global Fixed and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual and Dreyfus/standish 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 Dreyfusstandish Global Fixed are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Dreyfus/standish i.e., Dreyfus/standish and American Mutual go up and down completely randomly.
Pair Corralation between Dreyfus/standish and American Mutual
Assuming the 90 days horizon Dreyfusstandish Global Fixed is expected to generate 0.27 times more return on investment than American Mutual. However, Dreyfusstandish Global Fixed is 3.74 times less risky than American Mutual. It trades about 0.04 of its potential returns per unit of risk. American Mutual Fund is currently generating about -0.06 per unit of risk. If you would invest 2,061 in Dreyfusstandish Global Fixed on August 24, 2024 and sell it today you would earn a total of 3.00 from holding Dreyfusstandish Global Fixed or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dreyfusstandish Global Fixed vs. American Mutual Fund
Performance |
| Timeline |
| Dreyfusstandish Global |
| American Mutual |
Dreyfus/standish and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus/standish and American Mutual
The main advantage of trading using opposite Dreyfus/standish and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus/standish position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.| Dreyfus/standish vs. Vanguard Total International | Dreyfus/standish vs. Vanguard Total International | Dreyfus/standish vs. Vanguard Total International | Dreyfus/standish vs. Vanguard Total International |
| American Mutual vs. Dreyfusstandish Global Fixed | American Mutual vs. Balanced Fund Retail | American Mutual vs. Touchstone International Equity | American Mutual vs. Ultra Short Term Fixed |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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