Correlation Between Dreyfus High and Dreyfus Opportunistic
Can any of the company-specific risk be diversified away by investing in both Dreyfus High 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 Dreyfus High and Dreyfus Opportunistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus High Yield and Dreyfus Opportunistic Midcap, you can compare the effects of market volatilities on Dreyfus High 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 Dreyfus High with a short position of Dreyfus Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus High and Dreyfus Opportunistic.
Diversification Opportunities for Dreyfus High and Dreyfus Opportunistic
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus High Yield and Dreyfus Opportunistic Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Opportunistic and Dreyfus High 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 High Yield 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 Dreyfus High i.e., Dreyfus High and Dreyfus Opportunistic go up and down completely randomly.
Pair Corralation between Dreyfus High and Dreyfus Opportunistic
Assuming the 90 days horizon Dreyfus High Yield is expected to generate 0.19 times more return on investment than Dreyfus Opportunistic. However, Dreyfus High Yield is 5.31 times less risky than Dreyfus Opportunistic. It trades about -0.3 of its potential returns per unit of risk. Dreyfus Opportunistic Midcap is currently generating about -0.4 per unit of risk. If you would invest 1,112 in Dreyfus High Yield on September 24, 2024 and sell it today you would lose (25.00) from holding Dreyfus High Yield or give up 2.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dreyfus High Yield vs. Dreyfus Opportunistic Midcap
Performance |
Timeline |
Dreyfus High Yield |
Dreyfus Opportunistic |
Dreyfus High and Dreyfus Opportunistic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dreyfus High and Dreyfus Opportunistic
The main advantage of trading using opposite Dreyfus High and Dreyfus Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus High 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.Dreyfus High vs. Dreyfusstandish Global Fixed | Dreyfus High vs. Dreyfusstandish Global Fixed | Dreyfus High vs. Dreyfus High Yield | Dreyfus High vs. Dreyfus High Yield |
Dreyfus Opportunistic vs. Dreyfusstandish Global Fixed | Dreyfus Opportunistic vs. Dreyfusstandish Global Fixed | Dreyfus Opportunistic vs. Dreyfus High Yield | Dreyfus Opportunistic vs. Dreyfus High Yield |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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