Correlation Between Dreyfus Technology and Barings Active
Can any of the company-specific risk be diversified away by investing in both Dreyfus Technology and Barings 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 Technology and Barings Active 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 Barings Active Short, you can compare the effects of market volatilities on Dreyfus Technology and Barings 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 Technology with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Technology and Barings Active.
Diversification Opportunities for Dreyfus Technology and Barings Active
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dreyfus and Barings is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Technology Growth and Barings Active Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Active Short 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 Barings Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Active Short has no effect on the direction of Dreyfus Technology i.e., Dreyfus Technology and Barings Active go up and down completely randomly.
Pair Corralation between Dreyfus Technology and Barings Active
Assuming the 90 days horizon Dreyfus Technology Growth is expected to generate 10.86 times more return on investment than Barings Active. However, Dreyfus Technology is 10.86 times more volatile than Barings Active Short. It trades about 0.04 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.05 per unit of risk. If you would invest 7,743 in Dreyfus Technology Growth on September 25, 2024 and sell it today you would earn a total of 137.00 from holding Dreyfus Technology Growth or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Technology Growth vs. Barings Active Short
Performance |
| Timeline |
| Dreyfus Technology Growth |
| Barings Active Short |
Dreyfus Technology and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Technology and Barings Active
The main advantage of trading using opposite Dreyfus Technology and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Technology position performs unexpectedly, Barings 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 Barings Active will offset losses from the drop in Barings Active's long position.| Dreyfus Technology vs. Barings Active Short | Dreyfus Technology vs. Ab Select Longshort | Dreyfus Technology vs. Delaware Investments Ultrashort | Dreyfus Technology vs. Siit Ultra Short |
| Barings Active vs. The Gabelli Healthcare | Barings Active vs. Alphacentric Lifesci Healthcare | Barings Active vs. Lord Abbett Health | Barings Active vs. Vanguard Health Care |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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