Correlation Between Dreyfus Worldwide and Virtus Seix

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

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

Diversification Opportunities for Dreyfus Worldwide and Virtus Seix

-0.28

Correlation Coefficient

Dreyfus Worldwide  Virtus Seix

Very good diversification

The 3 months correlation between Dreyfus and Virtus is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Worldwide Growth and Virtus Seix Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Seix Government and Dreyfus Worldwide 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 Worldwide Growth are associated (or correlated) with Virtus Seix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Seix Government has no effect on the direction of Dreyfus Worldwide i.e., Dreyfus Worldwide and Virtus Seix go up and down completely randomly.

Pair Corralation between Dreyfus Worldwide and Virtus Seix

Assuming the 90 days horizon Dreyfus Worldwide is expected to generate 1.18 times less return on investment than Virtus Seix. In addition to that, Dreyfus Worldwide is 10.57 times more volatile than Virtus Seix Government. It trades about 0.02 of its total potential returns per unit of risk. Virtus Seix Government is currently generating about 0.22 per unit of volatility. If you would invest  897.00  in Virtus Seix Government on October 11, 2024 and sell it today you would earn a total of  92.00  from holding Virtus Seix Government or generate 10.26% return on investment over 90 days.

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

Dreyfus Worldwide Growth  vs.  Virtus Seix Government

Dreyfus Worldwide Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfus Worldwide Growth 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 fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Virtus Seix Government

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Seix Government are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Virtus Seix 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 Worldwide and Virtus Seix

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

The idea behind Dreyfus Worldwide Growth and Virtus Seix Government 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.