Correlation Between Valic Company and Dreyfus Technology
Can any of the company-specific risk be diversified away by investing in both Valic Company 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 Valic Company and Dreyfus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Dreyfus Technology Growth, you can compare the effects of market volatilities on Valic Company 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 Valic Company with a short position of Dreyfus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Dreyfus Technology.
Diversification Opportunities for Valic Company and Dreyfus Technology
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valic and Dreyfus is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I 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 Valic Company 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 Valic Company I 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 Valic Company i.e., Valic Company and Dreyfus Technology go up and down completely randomly.
Pair Corralation between Valic Company and Dreyfus Technology
Assuming the 90 days horizon Valic Company is expected to generate 1.52 times less return on investment than Dreyfus Technology. But when comparing it to its historical volatility, Valic Company I is 1.09 times less risky than Dreyfus Technology. It trades about 0.07 of its potential returns per unit of risk. Dreyfus Technology Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,728 in Dreyfus Technology Growth on August 31, 2024 and sell it today you would earn a total of 3,258 from holding Dreyfus Technology Growth or generate 68.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Dreyfus Technology Growth
Performance |
| Timeline |
| Valic Company I |
| Dreyfus Technology Growth |
Valic Company and Dreyfus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Dreyfus Technology
The main advantage of trading using opposite Valic Company and Dreyfus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company 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.| Valic Company vs. Dreyfus Technology Growth | Valic Company vs. Columbia Global Technology | Valic Company vs. Goldman Sachs Technology | Valic Company vs. Biotechnology Ultrasector Profund |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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