Correlation Between Dreyfus Technology and American Beacon
Can any of the company-specific risk be diversified away by investing in both Dreyfus Technology and American Beacon 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 Technology and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Technology Growth and American Beacon Bridgeway, you can compare the effects of market volatilities on Dreyfus Technology and American Beacon 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 Technology with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Technology and American Beacon.
Diversification Opportunities for Dreyfus Technology and American Beacon
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dreyfus and American is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Technology Growth and American Beacon Bridgeway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Bridgeway and Dreyfus Technology 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 Technology Growth are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Bridgeway has no effect on the direction of Dreyfus Technology i.e., Dreyfus Technology and American Beacon go up and down completely randomly.
Pair Corralation between Dreyfus Technology and American Beacon
Assuming the 90 days horizon Dreyfus Technology Growth is expected to generate 1.5 times more return on investment than American Beacon. However, Dreyfus Technology is 1.5 times more volatile than American Beacon Bridgeway. It trades about 0.09 of its potential returns per unit of risk. American Beacon Bridgeway is currently generating about 0.06 per unit of risk. If you would invest 5,656 in Dreyfus Technology Growth on August 30, 2024 and sell it today you would earn a total of 2,330 from holding Dreyfus Technology Growth or generate 41.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Technology Growth vs. American Beacon Bridgeway
Performance |
| Timeline |
| Dreyfus Technology Growth |
| American Beacon Bridgeway |
Dreyfus Technology and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Technology and American Beacon
The main advantage of trading using opposite Dreyfus Technology and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Technology position performs unexpectedly, American Beacon 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 Beacon will offset losses from the drop in American Beacon's long position.| Dreyfus Technology vs. Live Oak Health | Dreyfus Technology vs. HUMANA INC | Dreyfus Technology vs. Aquagold International | Dreyfus Technology vs. Barloworld Ltd ADR |
| American Beacon vs. Janus Global Technology | American Beacon vs. Dreyfus Technology Growth | American Beacon vs. Allianzgi Technology Fund | American Beacon vs. Fidelity Advisor Technology |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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