Correlation Between Dreyfus Balanced and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Dreyfus Balanced and NYSE Composite 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 Balanced and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Balanced Opportunity and NYSE Composite, you can compare the effects of market volatilities on Dreyfus Balanced and NYSE Composite 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 Balanced with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Balanced and NYSE Composite.
Diversification Opportunities for Dreyfus Balanced and NYSE Composite
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus and NYSE is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Balanced Opportunity and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Dreyfus Balanced 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 Balanced Opportunity are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Dreyfus Balanced i.e., Dreyfus Balanced and NYSE Composite go up and down completely randomly.
Pair Corralation between Dreyfus Balanced and NYSE Composite
Assuming the 90 days horizon Dreyfus Balanced Opportunity is expected to generate 1.08 times more return on investment than NYSE Composite. However, Dreyfus Balanced is 1.08 times more volatile than NYSE Composite. It trades about 0.0 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.06 per unit of risk. If you would invest 2,325 in Dreyfus Balanced Opportunity on February 4, 2024 and sell it today you would lose (1.00) from holding Dreyfus Balanced Opportunity or give up 0.04% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.65% |
Values | Daily Returns |
Dreyfus Balanced Opportunity vs. NYSE Composite
Performance |
Timeline |
Dreyfus Balanced and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Dreyfus Balanced Opportunity
Pair trading matchups for Dreyfus Balanced
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Dreyfus Balanced and NYSE Composite
The main advantage of trading using opposite Dreyfus Balanced and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Balanced position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Dreyfus Balanced vs. Microvast Holdings | Dreyfus Balanced vs. Dominos Pizza | Dreyfus Balanced vs. Enservco Co | Dreyfus Balanced vs. Pioneer Multi Asset Ultrashort |
NYSE Composite vs. Gerdau SA ADR | NYSE Composite vs. Transphorm Technology | NYSE Composite vs. KeyCorp | NYSE Composite vs. Chester Mining |
Check out your portfolio center.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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