Correlation Between Dreyfus Alcentra and Dreyfus Strategic
Can any of the company-specific risk be diversified away by investing in both Dreyfus Alcentra and Dreyfus Strategic 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 Alcentra and Dreyfus Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Alcentra Global and Dreyfus Strategic Municipal, you can compare the effects of market volatilities on Dreyfus Alcentra and Dreyfus Strategic 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 Alcentra with a short position of Dreyfus Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Alcentra and Dreyfus Strategic.
Diversification Opportunities for Dreyfus Alcentra and Dreyfus Strategic
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Alcentra Global and Dreyfus Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Strategic and Dreyfus Alcentra 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 Alcentra Global are associated (or correlated) with Dreyfus Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Strategic has no effect on the direction of Dreyfus Alcentra i.e., Dreyfus Alcentra and Dreyfus Strategic go up and down completely randomly.
Pair Corralation between Dreyfus Alcentra and Dreyfus Strategic
Assuming the 90 days horizon Dreyfus Alcentra is expected to generate 3.35 times less return on investment than Dreyfus Strategic. But when comparing it to its historical volatility, Dreyfus Alcentra Global is 4.73 times less risky than Dreyfus Strategic. It trades about 0.08 of its potential returns per unit of risk. Dreyfus Strategic Municipal is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 679.00 in Dreyfus Strategic Municipal on September 2, 2024 and sell it today you would earn a total of 12.00 from holding Dreyfus Strategic Municipal or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Alcentra Global vs. Dreyfus Strategic Municipal
Performance |
| Timeline |
| Dreyfus Alcentra Global |
| Dreyfus Strategic |
Dreyfus Alcentra and Dreyfus Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Alcentra and Dreyfus Strategic
The main advantage of trading using opposite Dreyfus Alcentra and Dreyfus Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Alcentra position performs unexpectedly, Dreyfus Strategic 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 Strategic will offset losses from the drop in Dreyfus Strategic's long position.| Dreyfus Alcentra vs. Vanguard Total Stock | Dreyfus Alcentra vs. Vanguard 500 Index | Dreyfus Alcentra vs. Vanguard Total Stock | Dreyfus Alcentra vs. Vanguard Total Stock |
| Dreyfus Strategic vs. Vanguard Total Stock | Dreyfus Strategic vs. Vanguard 500 Index | Dreyfus Strategic vs. Vanguard Total Stock | Dreyfus Strategic 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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