Correlation Between Dreyfus Alcentra and Dreyfus New

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

By analyzing existing cross correlation between Dreyfus Alcentra Global and Dreyfus New York, you can compare the effects of market volatilities on Dreyfus Alcentra and Dreyfus New 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 Alcentra with a short position of Dreyfus New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Alcentra and Dreyfus New.

Diversification Opportunities for Dreyfus Alcentra and Dreyfus New

0.47

Correlation Coefficient

Dreyfus Alcentra  Dreyfus New

Very weak diversification

The 3 months correlation between Dreyfus and Dreyfus is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Alcentra Global and Dreyfus New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus New York and Dreyfus Alcentra 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 Alcentra Global are associated (or correlated) with Dreyfus New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus New York has no effect on the direction of Dreyfus Alcentra i.e., Dreyfus Alcentra and Dreyfus New go up and down completely randomly.

Pair Corralation between Dreyfus Alcentra and Dreyfus New

Assuming the 90 days horizon Dreyfus Alcentra is expected to generate 1.24 times less return on investment than Dreyfus New. But when comparing it to its historical volatility, Dreyfus Alcentra Global is 2.38 times less risky than Dreyfus New. It trades about 0.08 of its potential returns per unit of risk. Dreyfus New York is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,370  in Dreyfus New York on August 31, 2024 and sell it today you would earn a total of  9.00  from holding Dreyfus New York or generate 0.66% return on investment over 90 days.

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

Dreyfus Alcentra Global  vs.  Dreyfus New York

Dreyfus Alcentra Global

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Alcentra Global 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, Dreyfus Alcentra is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dreyfus New York

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus New York are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Dreyfus New 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 Alcentra and Dreyfus New

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

The idea behind Dreyfus Alcentra Global and Dreyfus New York 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.