Correlation Between Dreyfus Balanced and Aggressive Growth
Can any of the company-specific risk be diversified away by investing in both Dreyfus Balanced and Aggressive Growth 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 Dreyfus Balanced and Aggressive Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Balanced Opportunity and Aggressive Growth Portfolio, you can compare the effects of market volatilities on Dreyfus Balanced and Aggressive Growth 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 Dreyfus Balanced with a short position of Aggressive Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Balanced and Aggressive Growth.
Diversification Opportunities for Dreyfus Balanced and Aggressive Growth
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dreyfus and Aggressive is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Balanced Opportunity and Aggressive Growth Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Growth and Dreyfus Balanced 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 Dreyfus Balanced Opportunity are associated (or correlated) with Aggressive Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Growth has no effect on the direction of Dreyfus Balanced i.e., Dreyfus Balanced and Aggressive Growth go up and down completely randomly.
Pair Corralation between Dreyfus Balanced and Aggressive Growth
Assuming the 90 days horizon Dreyfus Balanced Opportunity is expected to under-perform the Aggressive Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dreyfus Balanced Opportunity is 1.17 times less risky than Aggressive Growth. The mutual fund trades about -0.25 of its potential returns per unit of risk. The Aggressive Growth Portfolio is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 10,152 in Aggressive Growth Portfolio on September 25, 2024 and sell it today you would lose (461.00) from holding Aggressive Growth Portfolio or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Balanced Opportunity vs. Aggressive Growth Portfolio
Performance |
| Timeline |
| Dreyfus Balanced Opp |
| Aggressive Growth |
Dreyfus Balanced and Aggressive Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Balanced and Aggressive Growth
The main advantage of trading using opposite Dreyfus Balanced and Aggressive Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Balanced position performs unexpectedly, Aggressive Growth 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 Aggressive Growth will offset losses from the drop in Aggressive Growth's long position.| Dreyfus Balanced vs. Dreyfusstandish Global Fixed | Dreyfus Balanced vs. Dreyfusstandish Global Fixed | Dreyfus Balanced vs. Dreyfus High Yield | Dreyfus Balanced vs. Dreyfus High Yield |
| Aggressive Growth vs. Versatile Bond Portfolio | Aggressive Growth vs. Short Term Treasury Portfolio | Aggressive Growth vs. Permanent Portfolio Class | Aggressive Growth vs. Dreyfus Balanced Opportunity |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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