Correlation Between Dreyfus Strategic and Rice Hall

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

By analyzing existing cross correlation between Dreyfus Strategic Value and Rice Hall James, you can compare the effects of market volatilities on Dreyfus Strategic and Rice Hall 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 Rice Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Strategic and Rice Hall.

Diversification Opportunities for Dreyfus Strategic and Rice Hall

-0.07

Correlation Coefficient

Dreyfus Strategic  Rice Hall

Good diversification

The 3 months correlation between Dreyfus and Rice is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Strategic Value and Rice Hall James in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rice Hall James 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 Value are associated (or correlated) with Rice Hall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rice Hall James has no effect on the direction of Dreyfus Strategic i.e., Dreyfus Strategic and Rice Hall go up and down completely randomly.

Pair Corralation between Dreyfus Strategic and Rice Hall

Assuming the 90 days horizon Dreyfus Strategic Value is expected to generate 0.65 times more return on investment than Rice Hall. However, Dreyfus Strategic Value is 1.53 times less risky than Rice Hall. It trades about 0.07 of its potential returns per unit of risk. Rice Hall James is currently generating about -0.16 per unit of risk. If you would invest  4,416  in Dreyfus Strategic Value on December 21, 2024 and sell it today you would earn a total of  132.00  from holding Dreyfus Strategic Value or generate 2.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dreyfus Strategic Value  vs.  Rice Hall James

Dreyfus Strategic Value

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Strategic Value are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dreyfus Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rice Hall James

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rice Hall James has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Dreyfus Strategic and Rice Hall

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

The idea behind Dreyfus Strategic Value and Rice Hall James 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.