Correlation Between Dreyfus Government and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Dreyfus Government and Sterling Capital 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 Government and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Government Cash and Sterling Capital Mid, you can compare the effects of market volatilities on Dreyfus Government and Sterling Capital 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 Government with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Government and Sterling Capital.
Diversification Opportunities for Dreyfus Government and Sterling Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dreyfus and Sterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Government Cash and Sterling Capital Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Mid and Dreyfus Government 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 Government Cash are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Mid has no effect on the direction of Dreyfus Government i.e., Dreyfus Government and Sterling Capital go up and down completely randomly.
Pair Corralation between Dreyfus Government and Sterling Capital
Assuming the 90 days horizon Dreyfus Government Cash is expected to generate 0.27 times more return on investment than Sterling Capital. However, Dreyfus Government Cash is 3.71 times less risky than Sterling Capital. It trades about 0.06 of its potential returns per unit of risk. Sterling Capital Mid is currently generating about 0.01 per unit of risk. If you would invest 96.00 in Dreyfus Government Cash on November 3, 2024 and sell it today you would earn a total of 4.00 from holding Dreyfus Government Cash or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.63% |
| Values | Daily Returns |
Dreyfus Government Cash vs. Sterling Capital Mid
Performance |
| Timeline |
| Dreyfus Government Cash |
| Sterling Capital Mid |
Dreyfus Government and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Government and Sterling Capital
The main advantage of trading using opposite Dreyfus Government and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Government position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Dreyfus Government vs. Fulcrum Diversified Absolute | Dreyfus Government vs. Stone Ridge Diversified | Dreyfus Government vs. Voya Solution Conservative | Dreyfus Government vs. Tax Free Conservative Income |
| Sterling Capital vs. Harbor Diversified International | Sterling Capital vs. Jpmorgan Diversified Fund | Sterling Capital vs. Stone Ridge Diversified | Sterling Capital vs. Fulcrum Diversified Absolute |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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