Correlation Between Dreyfus Strategic and Nicholas
Can any of the company-specific risk be diversified away by investing in both Dreyfus Strategic and Nicholas 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 Strategic and Nicholas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Strategic Municipal and Nicholas Ii Inc, you can compare the effects of market volatilities on Dreyfus Strategic and Nicholas 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 Strategic with a short position of Nicholas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Strategic and Nicholas.
Diversification Opportunities for Dreyfus Strategic and Nicholas
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreyfus and Nicholas is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Strategic Municipal and Nicholas Ii Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicholas Ii and Dreyfus Strategic 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 Strategic Municipal are associated (or correlated) with Nicholas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicholas Ii has no effect on the direction of Dreyfus Strategic i.e., Dreyfus Strategic and Nicholas go up and down completely randomly.
Pair Corralation between Dreyfus Strategic and Nicholas
Assuming the 90 days horizon Dreyfus Strategic Municipal is expected to generate 0.44 times more return on investment than Nicholas. However, Dreyfus Strategic Municipal is 2.27 times less risky than Nicholas. It trades about -0.07 of its potential returns per unit of risk. Nicholas Ii Inc is currently generating about -0.04 per unit of risk. If you would invest 679.00 in Dreyfus Strategic Municipal on November 18, 2024 and sell it today you would lose (14.00) from holding Dreyfus Strategic Municipal or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Strategic Municipal vs. Nicholas Ii Inc
Performance |
| Timeline |
| Dreyfus Strategic |
| Nicholas Ii |
Dreyfus Strategic and Nicholas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Strategic and Nicholas
The main advantage of trading using opposite Dreyfus Strategic and Nicholas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Strategic position performs unexpectedly, Nicholas 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 Nicholas will offset losses from the drop in Nicholas' long position.| Dreyfus Strategic vs. Blackrock Global Longshort | Dreyfus Strategic vs. Pioneer Short Term | Dreyfus Strategic vs. Fidelity Flex Servative | Dreyfus Strategic vs. Rbc Ultra Short Fixed |
| Nicholas vs. Nicholas Fund Inc | Nicholas vs. Nicholas Ltd Edition | Nicholas vs. Nicholas Equity Income | Nicholas vs. Moderate Duration Fund |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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