Correlation Between Financial Industries and Dreyfus/standish
Can any of the company-specific risk be diversified away by investing in both Financial Industries 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 Financial Industries and Dreyfus/standish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial Industries Fund and Dreyfusstandish Global Fixed, you can compare the effects of market volatilities on Financial Industries 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 Financial Industries with a short position of Dreyfus/standish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Industries and Dreyfus/standish.
Diversification Opportunities for Financial Industries and Dreyfus/standish
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Financial and Dreyfus/standish is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Financial Industries Fund and Dreyfusstandish Global Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfusstandish Global and Financial Industries 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 Financial Industries Fund 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 Financial Industries i.e., Financial Industries and Dreyfus/standish go up and down completely randomly.
Pair Corralation between Financial Industries and Dreyfus/standish
Assuming the 90 days horizon Financial Industries Fund is expected to under-perform the Dreyfus/standish. In addition to that, Financial Industries is 3.77 times more volatile than Dreyfusstandish Global Fixed. It trades about -0.15 of its total potential returns per unit of risk. Dreyfusstandish Global Fixed is currently generating about 0.17 per unit of volatility. If you would invest 1,922 in Dreyfusstandish Global Fixed on November 27, 2024 and sell it today you would earn a total of 15.00 from holding Dreyfusstandish Global Fixed or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financial Industries Fund vs. Dreyfusstandish Global Fixed
Performance |
| Timeline |
| Financial Industries |
| Dreyfusstandish Global |
Financial Industries and Dreyfus/standish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial Industries and Dreyfus/standish
The main advantage of trading using opposite Financial Industries and Dreyfus/standish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Industries 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.| Financial Industries vs. Ashmore Emerging Markets | Financial Industries vs. Nuveen Small Cap | Financial Industries vs. Astoncrosswind Small Cap | Financial Industries vs. Glg Intl Small |
| Dreyfus/standish vs. Calamos Vertible Fund | Dreyfus/standish vs. Advent Claymore Convertible | Dreyfus/standish vs. Fidelity Vertible Securities | Dreyfus/standish vs. Putnam Vertible Securities |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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