Correlation Between Dreyfus Smallcap and Dreyfus Select

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

By analyzing existing cross correlation between Dreyfus Smallcap Stock and Dreyfus Select Managers, you can compare the effects of market volatilities on Dreyfus Smallcap and Dreyfus Select 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 Smallcap with a short position of Dreyfus Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Smallcap and Dreyfus Select.

Diversification Opportunities for Dreyfus Smallcap and Dreyfus Select

0.0

Correlation Coefficient

Dreyfus Smallcap  Dreyfus Select

Pay attention - limited upside

The 3 months correlation between Dreyfus and Dreyfus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Smallcap Stock and Dreyfus Select Managers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Select Managers and Dreyfus Smallcap 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 Smallcap Stock are associated (or correlated) with Dreyfus Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Select Managers has no effect on the direction of Dreyfus Smallcap i.e., Dreyfus Smallcap and Dreyfus Select go up and down completely randomly.

Pair Corralation between Dreyfus Smallcap and Dreyfus Select

If you would invest (100.00) in Dreyfus Select Managers on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Dreyfus Select Managers or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Dreyfus Smallcap Stock  vs.  Dreyfus Select Managers

Dreyfus Smallcap Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dreyfus Smallcap Stock has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Dreyfus Select Managers

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Dreyfus Smallcap and Dreyfus Select

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

The idea behind Dreyfus Smallcap Stock and Dreyfus Select Managers 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.