Correlation Between Dreyfus Research and Aston Martin

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

By analyzing existing cross correlation between Dreyfus Research Growth and Aston Martin Lagonda, you can compare the effects of market volatilities on Dreyfus Research and Aston Martin 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 Research with a short position of Aston Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Research and Aston Martin.

Diversification Opportunities for Dreyfus Research and Aston Martin

-0.44

Correlation Coefficient

Dreyfus Research  Aston Martin

Very good diversification

The 3 months correlation between Dreyfus and Aston is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Research Growth and Aston Martin Lagonda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Martin Lagonda and Dreyfus Research 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 Research Growth are associated (or correlated) with Aston Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Martin Lagonda has no effect on the direction of Dreyfus Research i.e., Dreyfus Research and Aston Martin go up and down completely randomly.

Pair Corralation between Dreyfus Research and Aston Martin

Assuming the 90 days horizon Dreyfus Research Growth is expected to under-perform the Aston Martin. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dreyfus Research Growth is 1.75 times less risky than Aston Martin. The mutual fund trades about -0.29 of its potential returns per unit of risk. The Aston Martin Lagonda is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  137.00  in Aston Martin Lagonda on October 5, 2024 and sell it today you would lose (8.00) from holding Aston Martin Lagonda or give up 5.84% of portfolio value over 90 days.

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

Dreyfus Research Growth  vs.  Aston Martin Lagonda

Dreyfus Research Growth

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Research Growth are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dreyfus Research is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aston Martin Lagonda

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aston Martin Lagonda has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Dreyfus Research and Aston Martin

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

The idea behind Dreyfus Research Growth and Aston Martin Lagonda 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..