Correlation Between Firsthand Technology and Dreyfus Technology
Can any of the company-specific risk be diversified away by investing in both Firsthand Technology and Dreyfus Technology 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 Firsthand Technology and Dreyfus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Technology Opportunities and Dreyfus Technology Growth, you can compare the effects of market volatilities on Firsthand Technology and Dreyfus Technology 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 Firsthand Technology with a short position of Dreyfus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and Dreyfus Technology.
Diversification Opportunities for Firsthand Technology and Dreyfus Technology
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Firsthand and Dreyfus is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni and Dreyfus Technology Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Technology Growth and Firsthand Technology 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 Firsthand Technology Opportunities are associated (or correlated) with Dreyfus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Technology Growth has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Dreyfus Technology go up and down completely randomly.
Pair Corralation between Firsthand Technology and Dreyfus Technology
Assuming the 90 days horizon Firsthand Technology Opportunities is expected to under-perform the Dreyfus Technology. In addition to that, Firsthand Technology is 1.72 times more volatile than Dreyfus Technology Growth. It trades about -0.04 of its total potential returns per unit of risk. Dreyfus Technology Growth is currently generating about 0.1 per unit of volatility. If you would invest 4,109 in Dreyfus Technology Growth on August 27, 2024 and sell it today you would earn a total of 3,930 from holding Dreyfus Technology Growth or generate 95.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Technology Opportuni vs. Dreyfus Technology Growth
Performance |
| Timeline |
| Firsthand Technology |
| Dreyfus Technology Growth |
Firsthand Technology and Dreyfus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Technology and Dreyfus Technology
The main advantage of trading using opposite Firsthand Technology and Dreyfus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Technology position performs unexpectedly, Dreyfus Technology 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 Technology will offset losses from the drop in Dreyfus Technology's long position.| Firsthand Technology vs. Berkshire Focus | Firsthand Technology vs. Red Oak Technology | Firsthand Technology vs. Jacob Internet Fund | Firsthand Technology vs. Kinetics Internet Fund |
| Dreyfus Technology vs. Clearbridge Energy Mlp | Dreyfus Technology vs. Hennessy Bp Energy | Dreyfus Technology vs. Firsthand Alternative Energy | Dreyfus Technology vs. Jennison Natural Resources |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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