Correlation Between International Fund and Dreyfus Government
Can any of the company-specific risk be diversified away by investing in both International Fund and Dreyfus Government 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 International Fund and Dreyfus Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Fund International and Dreyfus Government Cash, you can compare the effects of market volatilities on International Fund and Dreyfus Government 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 International Fund with a short position of Dreyfus Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Fund and Dreyfus Government.
Diversification Opportunities for International Fund and Dreyfus Government
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Dreyfus is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding International Fund Internation and Dreyfus Government Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Government Cash and International 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 International Fund International are associated (or correlated) with Dreyfus Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Government Cash has no effect on the direction of International Fund i.e., International Fund and Dreyfus Government go up and down completely randomly.
Pair Corralation between International Fund and Dreyfus Government
Assuming the 90 days horizon International Fund International is expected to generate 3.05 times more return on investment than Dreyfus Government. However, International Fund is 3.05 times more volatile than Dreyfus Government Cash. It trades about 0.07 of its potential returns per unit of risk. Dreyfus Government Cash is currently generating about 0.07 per unit of risk. If you would invest 2,380 in International Fund International on September 12, 2024 and sell it today you would earn a total of 442.00 from holding International Fund International or generate 18.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
International Fund Internation vs. Dreyfus Government Cash
Performance |
| Timeline |
| International Fund |
| Dreyfus Government Cash |
International Fund and Dreyfus Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Fund and Dreyfus Government
The main advantage of trading using opposite International Fund and Dreyfus Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Fund position performs unexpectedly, Dreyfus Government 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 Government will offset losses from the drop in Dreyfus Government's long position.| International Fund vs. Amg River Road | International Fund vs. Palm Valley Capital | International Fund vs. Great West Loomis Sayles | International Fund vs. Heartland Value Plus |
| Dreyfus Government vs. Vanguard Total Stock | Dreyfus Government vs. Vanguard 500 Index | Dreyfus Government vs. Vanguard Total Stock | Dreyfus Government vs. Vanguard Total Stock |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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