Correlation Between Virtus High and Dreyfus Global
Can any of the company-specific risk be diversified away by investing in both Virtus High and Dreyfus Global 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 Virtus High and Dreyfus Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus High Yield and Dreyfus Global Real, you can compare the effects of market volatilities on Virtus High and Dreyfus Global 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 Virtus High with a short position of Dreyfus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus High and Dreyfus Global.
Diversification Opportunities for Virtus High and Dreyfus Global
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and Dreyfus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Virtus High Yield and Dreyfus Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Global Real and Virtus 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 Virtus High Yield are associated (or correlated) with Dreyfus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Global Real has no effect on the direction of Virtus High i.e., Virtus High and Dreyfus Global go up and down completely randomly.
Pair Corralation between Virtus High and Dreyfus Global
Assuming the 90 days horizon Virtus High is expected to generate 6.55 times less return on investment than Dreyfus Global. But when comparing it to its historical volatility, Virtus High Yield is 2.9 times less risky than Dreyfus Global. It trades about 0.1 of its potential returns per unit of risk. Dreyfus Global Real is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,553 in Dreyfus Global Real on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Dreyfus Global Real or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Virtus High Yield vs. Dreyfus Global Real
Performance |
| Timeline |
| Virtus High Yield |
| Dreyfus Global Real |
Virtus High and Dreyfus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus High and Dreyfus Global
The main advantage of trading using opposite Virtus High and Dreyfus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus High position performs unexpectedly, Dreyfus Global 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 Global will offset losses from the drop in Dreyfus Global's long position.| Virtus High vs. SCOR PK | Virtus High vs. Morningstar Unconstrained Allocation | Virtus High vs. Via Renewables | Virtus High vs. Bondbloxx ETF Trust |
| Dreyfus Global vs. Aqr Long Short Equity | Dreyfus Global vs. Locorr Market Trend | Dreyfus Global vs. Barings Emerging Markets | Dreyfus Global vs. Western Asset Diversified |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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