Correlation Between Dreyfus Technology and Great-west Loomis
Can any of the company-specific risk be diversified away by investing in both Dreyfus Technology and Great-west Loomis 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 Great-west Loomis 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 Great West Loomis Sayles, you can compare the effects of market volatilities on Dreyfus Technology and Great-west Loomis 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 Great-west Loomis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Technology and Great-west Loomis.
Diversification Opportunities for Dreyfus Technology and Great-west Loomis
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus and Great-west is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Technology Growth and Great West Loomis Sayles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Loomis 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 Great-west Loomis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Loomis has no effect on the direction of Dreyfus Technology i.e., Dreyfus Technology and Great-west Loomis go up and down completely randomly.
Pair Corralation between Dreyfus Technology and Great-west Loomis
Assuming the 90 days horizon Dreyfus Technology Growth is expected to generate 1.24 times more return on investment than Great-west Loomis. However, Dreyfus Technology is 1.24 times more volatile than Great West Loomis Sayles. It trades about -0.22 of its potential returns per unit of risk. Great West Loomis Sayles is currently generating about -0.29 per unit of risk. If you would invest 8,042 in Dreyfus Technology Growth on October 16, 2024 and sell it today you would lose (453.00) from holding Dreyfus Technology Growth or give up 5.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Dreyfus Technology Growth vs. Great West Loomis Sayles
Performance |
| Timeline |
| Dreyfus Technology Growth |
| Great West Loomis |
Dreyfus Technology and Great-west Loomis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Technology and Great-west Loomis
The main advantage of trading using opposite Dreyfus Technology and Great-west Loomis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Technology position performs unexpectedly, Great-west Loomis 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 Great-west Loomis will offset losses from the drop in Great-west Loomis' long position.| Dreyfus Technology vs. Summit Global Investments | Dreyfus Technology vs. Alliancebernstein Global Highome | Dreyfus Technology vs. Morgan Stanley Global | Dreyfus Technology vs. Investec Global Franchise |
| Great-west Loomis vs. Msift High Yield | Great-west Loomis vs. Strategic Advisers Income | Great-west Loomis vs. Gmo High Yield | Great-west Loomis vs. Neuberger Berman Income |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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