Correlation Between Dreyfus Technology and Valic Company
Can any of the company-specific risk be diversified away by investing in both Dreyfus Technology and Valic Company 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 Valic Company 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 Valic Company I, you can compare the effects of market volatilities on Dreyfus Technology and Valic Company 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 Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Technology and Valic Company.
Diversification Opportunities for Dreyfus Technology and Valic Company
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus and Valic is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Technology Growth and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Dreyfus Technology i.e., Dreyfus Technology and Valic Company go up and down completely randomly.
Pair Corralation between Dreyfus Technology and Valic Company
Assuming the 90 days horizon Dreyfus Technology Growth is expected to generate 1.12 times more return on investment than Valic Company. However, Dreyfus Technology is 1.12 times more volatile than Valic Company I. It trades about 0.1 of its potential returns per unit of risk. Valic Company I is currently generating about 0.05 per unit of risk. If you would invest 4,201 in Dreyfus Technology Growth on September 2, 2024 and sell it today you would earn a total of 3,865 from holding Dreyfus Technology Growth or generate 92.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Technology Growth vs. Valic Company I
Performance |
| Timeline |
| Dreyfus Technology Growth |
| Valic Company I |
Dreyfus Technology and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Technology and Valic Company
The main advantage of trading using opposite Dreyfus Technology and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Technology position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.| Dreyfus Technology vs. Science Technology Fund | Dreyfus Technology vs. Towpath Technology | Dreyfus Technology vs. Allianzgi Technology Fund | Dreyfus Technology vs. Technology Ultrasector Profund |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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