Correlation Between Invesco Disciplined and Dreyfus Opportunistic

Can any of the company-specific risk be diversified away by investing in both Invesco Disciplined and Dreyfus Opportunistic 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 Invesco Disciplined and Dreyfus Opportunistic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Invesco Disciplined Equity and Dreyfus Opportunistic Small, you can compare the effects of market volatilities on Invesco Disciplined and Dreyfus Opportunistic 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 Invesco Disciplined with a short position of Dreyfus Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Disciplined and Dreyfus Opportunistic.

Diversification Opportunities for Invesco Disciplined and Dreyfus Opportunistic

0.82

Correlation Coefficient

Invesco Disciplined  Dreyfus Opportunistic

Very poor diversification

The 3 months correlation between Invesco and Dreyfus is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Disciplined Equity and Dreyfus Opportunistic Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Opportunistic and Invesco Disciplined 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 Invesco Disciplined Equity are associated (or correlated) with Dreyfus Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Opportunistic has no effect on the direction of Invesco Disciplined i.e., Invesco Disciplined and Dreyfus Opportunistic go up and down completely randomly.

Pair Corralation between Invesco Disciplined and Dreyfus Opportunistic

Assuming the 90 days horizon Invesco Disciplined Equity is expected to under-perform the Dreyfus Opportunistic. But the mutual fund apears to be less risky and, when comparing its historical volatility, Invesco Disciplined Equity is 1.28 times less risky than Dreyfus Opportunistic. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Dreyfus Opportunistic Small is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,227  in Dreyfus Opportunistic Small on October 24, 2024 and sell it today you would earn a total of  42.00  from holding Dreyfus Opportunistic Small or generate 1.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.78%
Values	Daily Returns

Invesco Disciplined Equity  vs.  Dreyfus Opportunistic Small

Invesco Disciplined

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Disciplined Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Invesco Disciplined is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dreyfus Opportunistic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Opportunistic Small are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Dreyfus Opportunistic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Invesco Disciplined and Dreyfus Opportunistic

The main advantage of trading using opposite Invesco Disciplined and Dreyfus Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Disciplined position performs unexpectedly, Dreyfus Opportunistic 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 Opportunistic will offset losses from the drop in Dreyfus Opportunistic's long position.

The idea behind Invesco Disciplined Equity and Dreyfus Opportunistic Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.