Correlation Between Dreyfus Strategic and Weitz Balanced
Can any of the company-specific risk be diversified away by investing in both Dreyfus Strategic and Weitz Balanced 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 Weitz Balanced 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 Weitz Balanced, you can compare the effects of market volatilities on Dreyfus Strategic and Weitz Balanced 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 Weitz Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Strategic and Weitz Balanced.
Diversification Opportunities for Dreyfus Strategic and Weitz Balanced
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreyfus and Weitz is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Strategic Municipal and Weitz Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weitz Balanced 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 Weitz Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weitz Balanced has no effect on the direction of Dreyfus Strategic i.e., Dreyfus Strategic and Weitz Balanced go up and down completely randomly.
Pair Corralation between Dreyfus Strategic and Weitz Balanced
Assuming the 90 days horizon Dreyfus Strategic Municipal is expected to under-perform the Weitz Balanced. In addition to that, Dreyfus Strategic is 1.14 times more volatile than Weitz Balanced. It trades about -0.04 of its total potential returns per unit of risk. Weitz Balanced is currently generating about -0.01 per unit of volatility. If you would invest 1,732 in Weitz Balanced on November 2, 2024 and sell it today you would lose (10.00) from holding Weitz Balanced or give up 0.58% 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. Weitz Balanced
Performance |
| Timeline |
| Dreyfus Strategic |
| Weitz Balanced |
Dreyfus Strategic and Weitz Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Strategic and Weitz Balanced
The main advantage of trading using opposite Dreyfus Strategic and Weitz Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Strategic position performs unexpectedly, Weitz Balanced 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 Weitz Balanced will offset losses from the drop in Weitz Balanced's long position.| Dreyfus Strategic vs. Fidelity Advisor Energy | Dreyfus Strategic vs. Energy Services Fund | Dreyfus Strategic vs. Oil Gas Ultrasector | Dreyfus Strategic vs. Cohen Steers Mlp |
| Weitz Balanced vs. Gmo Global Equity | Weitz Balanced vs. Siit Equity Factor | Weitz Balanced vs. Dreyfusstandish Global Fixed | Weitz Balanced vs. Ab Servative Wealth |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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