Correlation Between Dreyfus New and Dreyfus High
Can any of the company-specific risk be diversified away by investing in both Dreyfus New and Dreyfus High 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 New and Dreyfus High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus New Jersey and Dreyfus High Yield, you can compare the effects of market volatilities on Dreyfus New and Dreyfus High 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 New with a short position of Dreyfus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus New and Dreyfus High.
Diversification Opportunities for Dreyfus New and Dreyfus High
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus New Jersey and Dreyfus High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus High Yield and Dreyfus New 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 New Jersey are associated (or correlated) with Dreyfus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus High Yield has no effect on the direction of Dreyfus New i.e., Dreyfus New and Dreyfus High go up and down completely randomly.
Pair Corralation between Dreyfus New and Dreyfus High
Assuming the 90 days horizon Dreyfus New Jersey is expected to generate 0.74 times more return on investment than Dreyfus High. However, Dreyfus New Jersey is 1.35 times less risky than Dreyfus High. It trades about 0.06 of its potential returns per unit of risk. Dreyfus High Yield is currently generating about 0.04 per unit of risk. If you would invest 1,178 in Dreyfus New Jersey on August 28, 2024 and sell it today you would earn a total of 11.00 from holding Dreyfus New Jersey or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus New Jersey vs. Dreyfus High Yield
Performance |
| Timeline |
| Dreyfus New Jersey |
| Dreyfus High Yield |
Dreyfus New and Dreyfus High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus New and Dreyfus High
The main advantage of trading using opposite Dreyfus New and Dreyfus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus New position performs unexpectedly, Dreyfus High 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 Dreyfus High will offset losses from the drop in Dreyfus High's long position.| Dreyfus New vs. Dreyfusstandish Global Fixed | Dreyfus New vs. Dreyfusstandish Global Fixed | Dreyfus New vs. Dreyfus High Yield | Dreyfus New vs. Dreyfus High Yield |
| Dreyfus High vs. Dreyfusstandish Global Fixed | Dreyfus High vs. Dreyfusstandish Global Fixed | Dreyfus High vs. Dreyfus New Jersey | Dreyfus High vs. Dreyfus International Bond |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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