Correlation Between GM and Dreyfus Floating
Can any of the company-specific risk be diversified away by investing in both GM and Dreyfus Floating 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 GM and Dreyfus Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Dreyfus Floating Rate, you can compare the effects of market volatilities on GM and Dreyfus Floating 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 GM with a short position of Dreyfus Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Dreyfus Floating.
Diversification Opportunities for GM and Dreyfus Floating
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and Dreyfus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Dreyfus Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Floating Rate and GM 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 General Motors are associated (or correlated) with Dreyfus Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Floating Rate has no effect on the direction of GM i.e., GM and Dreyfus Floating go up and down completely randomly.
Pair Corralation between GM and Dreyfus Floating
Allowing for the 90-day total investment horizon General Motors is expected to generate 25.59 times more return on investment than Dreyfus Floating. However, GM is 25.59 times more volatile than Dreyfus Floating Rate. It trades about 0.09 of its potential returns per unit of risk. Dreyfus Floating Rate is currently generating about 0.46 per unit of risk. If you would invest 3,227 in General Motors on September 3, 2024 and sell it today you would earn a total of 2,277 from holding General Motors or generate 70.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Dreyfus Floating Rate
Performance |
| Timeline |
| General Motors |
| Dreyfus Floating Rate |
GM and Dreyfus Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Dreyfus Floating
The main advantage of trading using opposite GM and Dreyfus Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Dreyfus Floating 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 Floating will offset losses from the drop in Dreyfus Floating's long position.The idea behind General Motors and Dreyfus Floating Rate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dreyfus Floating vs. Sei Daily Income | Dreyfus Floating vs. Falcon Focus Scv | Dreyfus Floating vs. Volumetric Fund Volumetric | Dreyfus Floating vs. Materials Portfolio Fidelity |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |