Correlation Between NYSE Composite and Dreyfus Active
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Dreyfus Active 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 NYSE Composite and Dreyfus Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Dreyfus Active Midcap, you can compare the effects of market volatilities on NYSE Composite and Dreyfus Active 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 NYSE Composite with a short position of Dreyfus Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Dreyfus Active.
Diversification Opportunities for NYSE Composite and Dreyfus Active
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Dreyfus is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Dreyfus Active Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Active Midcap and NYSE Composite 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 NYSE Composite are associated (or correlated) with Dreyfus Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Active Midcap has no effect on the direction of NYSE Composite i.e., NYSE Composite and Dreyfus Active go up and down completely randomly.
Pair Corralation between NYSE Composite and Dreyfus Active
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.72 times more return on investment than Dreyfus Active. However, NYSE Composite is 1.39 times less risky than Dreyfus Active. It trades about -0.12 of its potential returns per unit of risk. Dreyfus Active Midcap is currently generating about -0.16 per unit of risk. If you would invest 1,812,226 in NYSE Composite on February 5, 2024 and sell it today you would lose (32,437) from holding NYSE Composite or give up 1.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Dreyfus Active Midcap
Performance |
Timeline |
NYSE Composite and Dreyfus Active Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Dreyfus Active Midcap
Pair trading matchups for Dreyfus Active
Pair Trading with NYSE Composite and Dreyfus Active
The main advantage of trading using opposite NYSE Composite and Dreyfus Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Dreyfus Active 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 Active will offset losses from the drop in Dreyfus Active's long position.NYSE Composite vs. Bridgford Foods | NYSE Composite vs. SunOpta | NYSE Composite vs. Where Food Comes | NYSE Composite vs. Sligro Food Group |
Dreyfus Active vs. Vanguard Mid Cap Index | Dreyfus Active vs. Vanguard Extended Market | Dreyfus Active vs. Fidelity Extended Market |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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