Correlation Between Dreyfus Select and Tax-managed

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

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

Diversification Opportunities for Dreyfus Select and Tax-managed

-0.45

Correlation Coefficient

Dreyfus Select  Tax-managed

Very good diversification

The 3 months correlation between Dreyfus and Tax-managed is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Select Managers and Tax Managed Mid Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tax Managed Mid and Dreyfus Select 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 Select Managers are associated (or correlated) with Tax-managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tax Managed Mid has no effect on the direction of Dreyfus Select i.e., Dreyfus Select and Tax-managed go up and down completely randomly.

Pair Corralation between Dreyfus Select and Tax-managed

If you would invest  2,155  in Dreyfus Select Managers on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Dreyfus Select Managers or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Dreyfus Select Managers  vs.  Tax Managed Mid Small

Dreyfus Select Managers

Risk-Adjusted Performance

0 of 100

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 forward indicators, Dreyfus Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tax Managed Mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tax Managed Mid Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Tax-managed 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 Select and Tax-managed

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

The idea behind Dreyfus Select Managers and Tax Managed Mid 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.