Correlation Between NYSE Composite and Dreyfus Fund
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Dreyfus Fund 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 NYSE Composite and Dreyfus Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Dreyfus Fund Inc, you can compare the effects of market volatilities on NYSE Composite and Dreyfus Fund 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 NYSE Composite with a short position of Dreyfus Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Dreyfus Fund.
Diversification Opportunities for NYSE Composite and Dreyfus Fund
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and DREYFUS is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Dreyfus Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Fund and NYSE Composite 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 NYSE Composite are associated (or correlated) with Dreyfus Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Fund has no effect on the direction of NYSE Composite i.e., NYSE Composite and Dreyfus Fund go up and down completely randomly.
Pair Corralation between NYSE Composite and Dreyfus Fund
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.86 times less return on investment than Dreyfus Fund. But when comparing it to its historical volatility, NYSE Composite is 1.21 times less risky than Dreyfus Fund. It trades about 0.08 of its potential returns per unit of risk. Dreyfus Fund Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,279 in Dreyfus Fund Inc on August 26, 2024 and sell it today you would earn a total of 819.00 from holding Dreyfus Fund Inc or generate 64.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Dreyfus Fund Inc
Performance |
| Timeline |
NYSE Composite and Dreyfus Fund Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Dreyfus Fund Inc
Pair trading matchups for Dreyfus Fund
Pair Trading with NYSE Composite and Dreyfus Fund
The main advantage of trading using opposite NYSE Composite and Dreyfus Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Dreyfus Fund 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 Fund will offset losses from the drop in Dreyfus Fund's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Dreyfus Fund vs. Dreyfusstandish Global Fixed | Dreyfus Fund vs. Dreyfusstandish Global Fixed | Dreyfus Fund vs. Dreyfus High Yield | Dreyfus Fund vs. Dreyfus High Yield |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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