Correlation Between Pace High and Dreyfus Active
Can any of the company-specific risk be diversified away by investing in both Pace High and Dreyfus Active 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 Pace High and Dreyfus Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace High Yield and Dreyfus Active Midcap, you can compare the effects of market volatilities on Pace High and Dreyfus Active 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 Pace High with a short position of Dreyfus Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace High and Dreyfus Active.
Diversification Opportunities for Pace High and Dreyfus Active
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pace and Dreyfus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield and Dreyfus Active Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Active Midcap and Pace 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 Pace High Yield are associated (or correlated) with Dreyfus Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Active Midcap has no effect on the direction of Pace High i.e., Pace High and Dreyfus Active go up and down completely randomly.
Pair Corralation between Pace High and Dreyfus Active
Assuming the 90 days horizon Pace High is expected to generate 2.78 times less return on investment than Dreyfus Active. But when comparing it to its historical volatility, Pace High Yield is 6.63 times less risky than Dreyfus Active. It trades about 0.32 of its potential returns per unit of risk. Dreyfus Active Midcap is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,048 in Dreyfus Active Midcap on September 3, 2024 and sell it today you would earn a total of 802.00 from holding Dreyfus Active Midcap or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace High Yield vs. Dreyfus Active Midcap
Performance |
| Timeline |
| Pace High Yield |
| Dreyfus Active Midcap |
Pace High and Dreyfus Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace High and Dreyfus Active
The main advantage of trading using opposite Pace High and Dreyfus Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High position performs unexpectedly, Dreyfus Active 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 Active will offset losses from the drop in Dreyfus Active's long position.| Pace High vs. Sarofim Equity | Pace High vs. Ultra Short Fixed Income | Pace High vs. Artisan Select Equity | Pace High vs. Cutler Equity |
| Dreyfus Active vs. Principal Lifetime Hybrid | Dreyfus Active vs. T Rowe Price | Dreyfus Active vs. Rational Strategic Allocation | Dreyfus Active vs. Rbb Fund |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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