Correlation Between Smallcap Fund and Dreyfus Global
Can any of the company-specific risk be diversified away by investing in both Smallcap Fund 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 Smallcap Fund and Dreyfus Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Fund Fka and Dreyfus Global Real, you can compare the effects of market volatilities on Smallcap Fund 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 Smallcap Fund with a short position of Dreyfus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Fund and Dreyfus Global.
Diversification Opportunities for Smallcap Fund and Dreyfus Global
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Smallcap and Dreyfus is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Fund Fka 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 Smallcap Fund 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 Smallcap Fund Fka 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 Smallcap Fund i.e., Smallcap Fund and Dreyfus Global go up and down completely randomly.
Pair Corralation between Smallcap Fund and Dreyfus Global
Assuming the 90 days horizon Smallcap Fund Fka is expected to generate 2.46 times more return on investment than Dreyfus Global. However, Smallcap Fund is 2.46 times more volatile than Dreyfus Global Real. It trades about 0.35 of its potential returns per unit of risk. Dreyfus Global Real is currently generating about 0.14 per unit of risk. If you would invest 2,549 in Smallcap Fund Fka on October 24, 2024 and sell it today you would earn a total of 161.00 from holding Smallcap Fund Fka or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap Fund Fka vs. Dreyfus Global Real
Performance |
| Timeline |
| Smallcap Fund Fka |
| Dreyfus Global Real |
Smallcap Fund and Dreyfus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Fund and Dreyfus Global
The main advantage of trading using opposite Smallcap Fund and Dreyfus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Fund 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.| Smallcap Fund vs. Greenspring Fund Retail | Smallcap Fund vs. Aqr Long Short Equity | Smallcap Fund vs. T Rowe Price | Smallcap Fund vs. Gmo Global Equity |
| Dreyfus Global vs. Franklin Small Cap | Dreyfus Global vs. Ab Small Cap | Dreyfus Global vs. Vy Columbia Small | Dreyfus Global vs. Smallcap Fund Fka |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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