Correlation Between NYSE Composite and Dreyfus Gnma
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Dreyfus Gnma 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 Gnma 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 Gnma Fund, you can compare the effects of market volatilities on NYSE Composite and Dreyfus Gnma 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 Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Dreyfus Gnma.
Diversification Opportunities for NYSE Composite and Dreyfus Gnma
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Dreyfus is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Dreyfus Gnma Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Gnma 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 Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Gnma has no effect on the direction of NYSE Composite i.e., NYSE Composite and Dreyfus Gnma go up and down completely randomly.
Pair Corralation between NYSE Composite and Dreyfus Gnma
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Dreyfus Gnma. In addition to that, NYSE Composite is 2.04 times more volatile than Dreyfus Gnma Fund. It trades about -0.05 of its total potential returns per unit of risk. Dreyfus Gnma Fund is currently generating about 0.12 per unit of volatility. If you would invest 1,268 in Dreyfus Gnma Fund on November 27, 2024 and sell it today you would earn a total of 9.00 from holding Dreyfus Gnma Fund or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Dreyfus Gnma Fund
Performance |
| Timeline |
NYSE Composite and Dreyfus Gnma Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Dreyfus Gnma Fund
Pair trading matchups for Dreyfus Gnma
Pair Trading with NYSE Composite and Dreyfus Gnma
The main advantage of trading using opposite NYSE Composite and Dreyfus Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Dreyfus Gnma 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 Gnma will offset losses from the drop in Dreyfus Gnma's long position.| NYSE Composite vs. Unum Group | NYSE Composite vs. Palomar Holdings | NYSE Composite vs. Fidelity National Financial | NYSE Composite vs. ZW Data Action |
| Dreyfus Gnma vs. Wasatch Large Cap | Dreyfus Gnma vs. Fisher Large Cap | Dreyfus Gnma vs. Blackrock Large Cap | Dreyfus Gnma vs. Jpmorgan Large 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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