Correlation Between Dreyfus Technology and Aegis Value

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

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

Diversification Opportunities for Dreyfus Technology and Aegis Value

-0.12

Correlation Coefficient

Dreyfus Technology  Aegis Value

Good diversification

The 3 months correlation between Dreyfus and Aegis is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Technology Growth and Aegis Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegis Value Fund and Dreyfus Technology 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 Technology Growth are associated (or correlated) with Aegis Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegis Value Fund has no effect on the direction of Dreyfus Technology i.e., Dreyfus Technology and Aegis Value go up and down completely randomly.

Pair Corralation between Dreyfus Technology and Aegis Value

Assuming the 90 days horizon Dreyfus Technology Growth is expected to generate 0.64 times more return on investment than Aegis Value. However, Dreyfus Technology Growth is 1.55 times less risky than Aegis Value. It trades about -0.04 of its potential returns per unit of risk. Aegis Value Fund is currently generating about -0.37 per unit of risk. If you would invest  8,037  in Dreyfus Technology Growth on September 25, 2024 and sell it today you would lose (99.00) from holding Dreyfus Technology Growth or give up 1.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Dreyfus Technology Growth  vs.  Aegis Value Fund

Dreyfus Technology Growth

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Technology Growth are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dreyfus Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aegis Value Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aegis Value Fund 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 essential indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Dreyfus Technology and Aegis Value

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

The idea behind Dreyfus Technology Growth and Aegis Value Fund 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..