Correlation Between Perkins Small and Dreyfus Opportunistic
Can any of the company-specific risk be diversified away by investing in both Perkins Small and Dreyfus Opportunistic 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 Perkins Small and Dreyfus Opportunistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perkins Small Cap and Dreyfus Opportunistic Midcap, you can compare the effects of market volatilities on Perkins Small and Dreyfus Opportunistic 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 Perkins Small with a short position of Dreyfus Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perkins Small and Dreyfus Opportunistic.
Diversification Opportunities for Perkins Small and Dreyfus Opportunistic
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Perkins and Dreyfus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Perkins Small Cap and Dreyfus Opportunistic Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Opportunistic and Perkins Small 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 Perkins Small Cap are associated (or correlated) with Dreyfus Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Opportunistic has no effect on the direction of Perkins Small i.e., Perkins Small and Dreyfus Opportunistic go up and down completely randomly.
Pair Corralation between Perkins Small and Dreyfus Opportunistic
Assuming the 90 days horizon Perkins Small Cap is expected to under-perform the Dreyfus Opportunistic. In addition to that, Perkins Small is 2.68 times more volatile than Dreyfus Opportunistic Midcap. It trades about -0.05 of its total potential returns per unit of risk. Dreyfus Opportunistic Midcap is currently generating about 0.09 per unit of volatility. If you would invest 3,388 in Dreyfus Opportunistic Midcap on September 13, 2024 and sell it today you would earn a total of 94.00 from holding Dreyfus Opportunistic Midcap or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Perkins Small Cap vs. Dreyfus Opportunistic Midcap
Performance |
| Timeline |
| Perkins Small Cap |
| Dreyfus Opportunistic |
Perkins Small and Dreyfus Opportunistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perkins Small and Dreyfus Opportunistic
The main advantage of trading using opposite Perkins Small and Dreyfus Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perkins Small position performs unexpectedly, Dreyfus Opportunistic 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 Opportunistic will offset losses from the drop in Dreyfus Opportunistic's long position.| Perkins Small vs. Dreyfus Opportunistic Midcap | Perkins Small vs. American Beacon International | Perkins Small vs. American Beacon Balanced | Perkins Small vs. American Beacon Small |
| Dreyfus Opportunistic vs. Applied Finance Explorer | Dreyfus Opportunistic vs. Lord Abbett Small | Dreyfus Opportunistic vs. Palm Valley Capital | Dreyfus Opportunistic vs. Ab Small Cap |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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