Correlation Between Fabwx and Dreyfus/standish
Can any of the company-specific risk be diversified away by investing in both Fabwx and Dreyfus/standish 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 Fabwx and Dreyfus/standish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabwx and Dreyfusstandish Global Fixed, you can compare the effects of market volatilities on Fabwx and Dreyfus/standish 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 Fabwx with a short position of Dreyfus/standish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabwx and Dreyfus/standish.
Diversification Opportunities for Fabwx and Dreyfus/standish
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fabwx and Dreyfus/standish is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fabwx and Dreyfusstandish Global Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfusstandish Global and Fabwx 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 Fabwx are associated (or correlated) with Dreyfus/standish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfusstandish Global has no effect on the direction of Fabwx i.e., Fabwx and Dreyfus/standish go up and down completely randomly.
Pair Corralation between Fabwx and Dreyfus/standish
Assuming the 90 days horizon Fabwx is expected to generate 3.69 times more return on investment than Dreyfus/standish. However, Fabwx is 3.69 times more volatile than Dreyfusstandish Global Fixed. It trades about 0.32 of its potential returns per unit of risk. Dreyfusstandish Global Fixed is currently generating about -0.01 per unit of risk. If you would invest 1,499 in Fabwx on October 24, 2024 and sell it today you would earn a total of 59.00 from holding Fabwx or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.78% |
| Values | Daily Returns |
Fabwx vs. Dreyfusstandish Global Fixed
Performance |
| Timeline |
| Fabwx |
| Dreyfusstandish Global |
Fabwx and Dreyfus/standish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabwx and Dreyfus/standish
The main advantage of trading using opposite Fabwx and Dreyfus/standish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabwx position performs unexpectedly, Dreyfus/standish 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/standish will offset losses from the drop in Dreyfus/standish's long position.| Fabwx vs. Vanguard Total Stock | Fabwx vs. Vanguard 500 Index | Fabwx vs. Vanguard Total Stock | Fabwx vs. Vanguard Total Stock |
| Dreyfus/standish vs. Fabwx | Dreyfus/standish vs. Fpddjx | Dreyfus/standish vs. Fbjygx | Dreyfus/standish vs. Arrow Managed Futures |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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