Correlation Between Guinness Atkinson and Dreyfus Natural
Can any of the company-specific risk be diversified away by investing in both Guinness Atkinson and Dreyfus Natural 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 Guinness Atkinson and Dreyfus Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guinness Atkinson Alternative and Dreyfus Natural Resources, you can compare the effects of market volatilities on Guinness Atkinson and Dreyfus Natural 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 Guinness Atkinson with a short position of Dreyfus Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guinness Atkinson and Dreyfus Natural.
Diversification Opportunities for Guinness Atkinson and Dreyfus Natural
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guinness and Dreyfus is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Guinness Atkinson Alternative and Dreyfus Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Natural Resources and Guinness Atkinson 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 Guinness Atkinson Alternative are associated (or correlated) with Dreyfus Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Natural Resources has no effect on the direction of Guinness Atkinson i.e., Guinness Atkinson and Dreyfus Natural go up and down completely randomly.
Pair Corralation between Guinness Atkinson and Dreyfus Natural
Assuming the 90 days horizon Guinness Atkinson is expected to generate 4.82 times less return on investment than Dreyfus Natural. In addition to that, Guinness Atkinson is 1.06 times more volatile than Dreyfus Natural Resources. It trades about 0.01 of its total potential returns per unit of risk. Dreyfus Natural Resources is currently generating about 0.06 per unit of volatility. If you would invest 3,893 in Dreyfus Natural Resources on September 1, 2024 and sell it today you would earn a total of 496.00 from holding Dreyfus Natural Resources or generate 12.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guinness Atkinson Alternative vs. Dreyfus Natural Resources
Performance |
| Timeline |
| Guinness Atkinson |
| Dreyfus Natural Resources |
Guinness Atkinson and Dreyfus Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guinness Atkinson and Dreyfus Natural
The main advantage of trading using opposite Guinness Atkinson and Dreyfus Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guinness Atkinson position performs unexpectedly, Dreyfus Natural 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 Natural will offset losses from the drop in Dreyfus Natural's long position.| Guinness Atkinson vs. New Alternatives Fund | Guinness Atkinson vs. Calvert Global Energy | Guinness Atkinson vs. Firsthand Alternative Energy | Guinness Atkinson vs. Guinness Atkinson Global |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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