Correlation Between Dreyfus Technology and Multi Manager
Can any of the company-specific risk be diversified away by investing in both Dreyfus Technology and Multi Manager 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 Multi Manager 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 Multi Manager High Yield, you can compare the effects of market volatilities on Dreyfus Technology and Multi Manager 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 Multi Manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Technology and Multi Manager.
Diversification Opportunities for Dreyfus Technology and Multi Manager
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dreyfus and Multi is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Technology Growth and Multi Manager High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager High 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 Multi Manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager High has no effect on the direction of Dreyfus Technology i.e., Dreyfus Technology and Multi Manager go up and down completely randomly.
Pair Corralation between Dreyfus Technology and Multi Manager
Assuming the 90 days horizon Dreyfus Technology Growth is expected to generate 6.1 times more return on investment than Multi Manager. However, Dreyfus Technology is 6.1 times more volatile than Multi Manager High Yield. It trades about 0.09 of its potential returns per unit of risk. Multi Manager High Yield is currently generating about 0.15 per unit of risk. If you would invest 4,668 in Dreyfus Technology Growth on October 28, 2024 and sell it today you would earn a total of 3,483 from holding Dreyfus Technology Growth or generate 74.61% 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. Multi Manager High Yield
Performance |
| Timeline |
| Dreyfus Technology Growth |
| Multi Manager High |
Dreyfus Technology and Multi Manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Technology and Multi Manager
The main advantage of trading using opposite Dreyfus Technology and Multi Manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Technology position performs unexpectedly, Multi Manager 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 Multi Manager will offset losses from the drop in Multi Manager's long position.| Dreyfus Technology vs. Vy Columbia Small | Dreyfus Technology vs. Ab Small Cap | Dreyfus Technology vs. Touchstone Small Cap | Dreyfus Technology vs. Kinetics Small Cap |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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