Correlation Between Fisher Investments and Dreyfus Opportunistic

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

By analyzing existing cross correlation between Fisher Small Cap and Dreyfus Opportunistic Midcap, you can compare the effects of market volatilities on Fisher Investments and Dreyfus Opportunistic 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 Fisher Investments with a short position of Dreyfus Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Investments and Dreyfus Opportunistic.

Diversification Opportunities for Fisher Investments and Dreyfus Opportunistic

0.94

Correlation Coefficient

Fisher Investments  Dreyfus Opportunistic

Almost no diversification

The 3 months correlation between Fisher and Dreyfus is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Small Cap and Dreyfus Opportunistic Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Opportunistic and Fisher Investments 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 Fisher Small Cap are associated (or correlated) with Dreyfus Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Opportunistic has no effect on the direction of Fisher Investments i.e., Fisher Investments and Dreyfus Opportunistic go up and down completely randomly.

Pair Corralation between Fisher Investments and Dreyfus Opportunistic

Assuming the 90 days horizon Fisher Investments is expected to generate 1.13 times less return on investment than Dreyfus Opportunistic. In addition to that, Fisher Investments is 1.58 times more volatile than Dreyfus Opportunistic Midcap. It trades about 0.04 of its total potential returns per unit of risk. Dreyfus Opportunistic Midcap is currently generating about 0.07 per unit of volatility. If you would invest  2,652  in Dreyfus Opportunistic Midcap on September 5, 2024 and sell it today you would earn a total of  896.00  from holding Dreyfus Opportunistic Midcap or generate 33.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

Fisher Small Cap  vs.  Dreyfus Opportunistic Midcap

Fisher Investments

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Small Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fisher Investments showed solid returns over the last few months and may actually be approaching a breakup point.

Dreyfus Opportunistic

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Opportunistic Midcap are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dreyfus Opportunistic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fisher Investments and Dreyfus Opportunistic

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

The idea behind Fisher Small Cap and Dreyfus Opportunistic Midcap 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.