Correlation Between Dreyfus New and Dreyfus International
Can any of the company-specific risk be diversified away by investing in both Dreyfus New and Dreyfus International 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 International 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 International Bond, you can compare the effects of market volatilities on Dreyfus New and Dreyfus International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus New and Dreyfus International.
Diversification Opportunities for Dreyfus New and Dreyfus International
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus New Jersey and Dreyfus International Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus International has no effect on the direction of Dreyfus New i.e., Dreyfus New and Dreyfus International go up and down completely randomly.
Pair Corralation between Dreyfus New and Dreyfus International
Assuming the 90 days horizon Dreyfus New Jersey is expected to generate 0.73 times more return on investment than Dreyfus International. However, Dreyfus New Jersey is 1.37 times less risky than Dreyfus International. It trades about 0.15 of its potential returns per unit of risk. Dreyfus International Bond is currently generating about -0.21 per unit of risk. If you would invest 1,177 in Dreyfus New Jersey on August 28, 2024 and sell it today you would earn a total of 12.00 from holding Dreyfus New Jersey or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus New Jersey vs. Dreyfus International Bond
Performance |
| Timeline |
| Dreyfus New Jersey |
| Dreyfus International |
Dreyfus New and Dreyfus International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus New and Dreyfus International
The main advantage of trading using opposite Dreyfus New and Dreyfus International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus New position performs unexpectedly, Dreyfus International 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 International will offset losses from the drop in Dreyfus International'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 International vs. Dreyfusstandish Global Fixed | Dreyfus International vs. Dreyfusstandish Global Fixed | Dreyfus International vs. Dreyfus High Yield | Dreyfus International vs. Dreyfus High Yield |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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