Correlation Between American Funds and Dreyfus Government
Can any of the company-specific risk be diversified away by investing in both American Funds and Dreyfus Government 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 American Funds and Dreyfus Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Inflation and Dreyfus Government Cash, you can compare the effects of market volatilities on American Funds and Dreyfus Government 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 American Funds with a short position of Dreyfus Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Dreyfus Government.
Diversification Opportunities for American Funds and Dreyfus Government
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Dreyfus is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Inflation and Dreyfus Government Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Government Cash and American Funds 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 American Funds Inflation are associated (or correlated) with Dreyfus Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Government Cash has no effect on the direction of American Funds i.e., American Funds and Dreyfus Government go up and down completely randomly.
Pair Corralation between American Funds and Dreyfus Government
Assuming the 90 days horizon American Funds is expected to generate 2.48 times less return on investment than Dreyfus Government. In addition to that, American Funds is 1.36 times more volatile than Dreyfus Government Cash. It trades about 0.02 of its total potential returns per unit of risk. Dreyfus Government Cash is currently generating about 0.07 per unit of volatility. If you would invest 95.00 in Dreyfus Government Cash on September 23, 2024 and sell it today you would earn a total of 5.00 from holding Dreyfus Government Cash or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.54% |
| Values | Daily Returns |
American Funds Inflation vs. Dreyfus Government Cash
Performance |
| Timeline |
| American Funds Inflation |
| Dreyfus Government Cash |
American Funds and Dreyfus Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Dreyfus Government
The main advantage of trading using opposite American Funds and Dreyfus Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Dreyfus Government 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 Government will offset losses from the drop in Dreyfus Government's long position.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| Dreyfus Government vs. Goldman Sachs Inflation | Dreyfus Government vs. American Funds Inflation | Dreyfus Government vs. Lord Abbett Inflation | Dreyfus Government vs. Blackrock Inflation Protected |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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