Correlation Between International Stock and Dreyfus/the Boston

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

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

Diversification Opportunities for International Stock and Dreyfus/the Boston

0.62

Correlation Coefficient

International Stock  Dreyfus/the Boston

Poor diversification

The 3 months correlation between International and Dreyfus/the is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding International Stock Fund and Dreyfusthe Boston Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfusthe Boston Pany and International Stock 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 International Stock Fund are associated (or correlated) with Dreyfus/the Boston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfusthe Boston Pany has no effect on the direction of International Stock i.e., International Stock and Dreyfus/the Boston go up and down completely randomly.

Pair Corralation between International Stock and Dreyfus/the Boston

Assuming the 90 days horizon International Stock Fund is expected to generate 0.95 times more return on investment than Dreyfus/the Boston. However, International Stock Fund is 1.05 times less risky than Dreyfus/the Boston. It trades about 0.03 of its potential returns per unit of risk. Dreyfusthe Boston Pany is currently generating about -0.19 per unit of risk. If you would invest  2,377  in International Stock Fund on November 28, 2024 and sell it today you would earn a total of  12.00  from holding International Stock Fund or generate 0.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

International Stock Fund  vs.  Dreyfusthe Boston Pany

International Stock

Risk-Adjusted Performance

Very Weak

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

Dreyfusthe Boston Pany

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dreyfusthe Boston Pany 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 basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with International Stock and Dreyfus/the Boston

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

The idea behind International Stock Fund and Dreyfusthe Boston Pany 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.