Correlation Between Saat Aggressive and Dreyfus Midcap
Can any of the company-specific risk be diversified away by investing in both Saat Aggressive and Dreyfus Midcap 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 Saat Aggressive and Dreyfus Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Aggressive Strategy and Dreyfus Midcap Index, you can compare the effects of market volatilities on Saat Aggressive and Dreyfus Midcap 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 Saat Aggressive with a short position of Dreyfus Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Aggressive and Dreyfus Midcap.
Diversification Opportunities for Saat Aggressive and Dreyfus Midcap
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Saat and Dreyfus is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Saat Aggressive Strategy and Dreyfus Midcap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Midcap Index and Saat Aggressive 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 Saat Aggressive Strategy are associated (or correlated) with Dreyfus Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Midcap Index has no effect on the direction of Saat Aggressive i.e., Saat Aggressive and Dreyfus Midcap go up and down completely randomly.
Pair Corralation between Saat Aggressive and Dreyfus Midcap
Assuming the 90 days horizon Saat Aggressive Strategy is expected to generate 0.73 times more return on investment than Dreyfus Midcap. However, Saat Aggressive Strategy is 1.37 times less risky than Dreyfus Midcap. It trades about 0.28 of its potential returns per unit of risk. Dreyfus Midcap Index is currently generating about 0.17 per unit of risk. If you would invest 1,460 in Saat Aggressive Strategy on November 4, 2024 and sell it today you would earn a total of 49.00 from holding Saat Aggressive Strategy or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Aggressive Strategy vs. Dreyfus Midcap Index
Performance |
| Timeline |
| Saat Aggressive Strategy |
| Dreyfus Midcap Index |
Saat Aggressive and Dreyfus Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Aggressive and Dreyfus Midcap
The main advantage of trading using opposite Saat Aggressive and Dreyfus Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Aggressive position performs unexpectedly, Dreyfus Midcap 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 Midcap will offset losses from the drop in Dreyfus Midcap's long position.| Saat Aggressive vs. Saat Market Growth | Saat Aggressive vs. Saat Moderate Strategy | Saat Aggressive vs. Saat Servative Strategy | Saat Aggressive vs. Simt Large Cap |
| Dreyfus Midcap vs. Dreyfus Smallcap Stock | Dreyfus Midcap vs. Bny Mellon Emerging | Dreyfus Midcap vs. Champlain Mid 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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