Correlation Between Dreyfusthe Boston and Dreyfus Fund

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

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

Diversification Opportunities for Dreyfusthe Boston and Dreyfus Fund

0.72

Correlation Coefficient

Dreyfusthe Boston  Dreyfus Fund

Poor diversification

The 3 months correlation between Dreyfusthe and Dreyfus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfusthe Boston Pany and Dreyfus Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Fund and Dreyfusthe Boston 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 Dreyfusthe Boston Pany are associated (or correlated) with Dreyfus Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Fund has no effect on the direction of Dreyfusthe Boston i.e., Dreyfusthe Boston and Dreyfus Fund go up and down completely randomly.

Pair Corralation between Dreyfusthe Boston and Dreyfus Fund

Assuming the 90 days horizon Dreyfusthe Boston Pany is expected to under-perform the Dreyfus Fund. In addition to that, Dreyfusthe Boston is 1.78 times more volatile than Dreyfus Fund Inc. It trades about -0.13 of its total potential returns per unit of risk. Dreyfus Fund Inc is currently generating about -0.09 per unit of volatility. If you would invest  2,039  in Dreyfus Fund Inc on September 23, 2024 and sell it today you would lose (116.00) from holding Dreyfus Fund Inc or give up 5.69% of portfolio value over 90 days.

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

Dreyfusthe Boston Pany  vs.  Dreyfus Fund Inc

Dreyfusthe Boston Pany

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfusthe Boston Pany 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 basic 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.

Dreyfus Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfus Fund Inc has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dreyfus Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dreyfusthe Boston and Dreyfus Fund

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

The idea behind Dreyfusthe Boston Pany and Dreyfus Fund Inc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.