Correlation Between Prudential High and Dreyfus Strategic
Can any of the company-specific risk be diversified away by investing in both Prudential High and Dreyfus Strategic 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 Prudential High and Dreyfus Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential High Yield and Dreyfus Strategic Value, you can compare the effects of market volatilities on Prudential High and Dreyfus Strategic 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 Prudential High with a short position of Dreyfus Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential High and Dreyfus Strategic.
Diversification Opportunities for Prudential High and Dreyfus Strategic
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prudential and Dreyfus is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Prudential High Yield and Dreyfus Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Strategic Value and Prudential High 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 Prudential High Yield are associated (or correlated) with Dreyfus Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Strategic Value has no effect on the direction of Prudential High i.e., Prudential High and Dreyfus Strategic go up and down completely randomly.
Pair Corralation between Prudential High and Dreyfus Strategic
Assuming the 90 days horizon Prudential High Yield is expected to generate 0.15 times more return on investment than Dreyfus Strategic. However, Prudential High Yield is 6.6 times less risky than Dreyfus Strategic. It trades about 0.08 of its potential returns per unit of risk. Dreyfus Strategic Value is currently generating about -0.15 per unit of risk. If you would invest 479.00 in Prudential High Yield on November 3, 2024 and sell it today you would earn a total of 3.00 from holding Prudential High Yield or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential High Yield vs. Dreyfus Strategic Value
Performance |
| Timeline |
| Prudential High Yield |
| Dreyfus Strategic Value |
Prudential High and Dreyfus Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential High and Dreyfus Strategic
The main advantage of trading using opposite Prudential High and Dreyfus Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential High position performs unexpectedly, Dreyfus Strategic 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 Strategic will offset losses from the drop in Dreyfus Strategic's long position.| Prudential High vs. Technology Ultrasector Profund | Prudential High vs. Columbia Global Technology | Prudential High vs. Specialized Technology Fund | Prudential High vs. Dreyfus Technology Growth |
| Dreyfus Strategic vs. Calvert Developed Market | Dreyfus Strategic vs. Ashmore Emerging Markets | Dreyfus Strategic vs. Nasdaq 100 2x Strategy | Dreyfus Strategic vs. Siit Emerging Markets |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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