Correlation Between Dreyfus International and First Foundation

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

By analyzing existing cross correlation between Dreyfus International Equity and First Foundation Total, you can compare the effects of market volatilities on Dreyfus International and First Foundation 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 International with a short position of First Foundation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus International and First Foundation.

Diversification Opportunities for Dreyfus International and First Foundation

0.94

Correlation Coefficient

Dreyfus International  First Foundation

Almost no diversification

The 3 months correlation between Dreyfus and First is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus International Equity and First Foundation Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Foundation Total and Dreyfus International 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 International Equity are associated (or correlated) with First Foundation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Foundation Total has no effect on the direction of Dreyfus International i.e., Dreyfus International and First Foundation go up and down completely randomly.

Pair Corralation between Dreyfus International and First Foundation

Assuming the 90 days horizon Dreyfus International is expected to generate 1.51 times less return on investment than First Foundation. In addition to that, Dreyfus International is 1.21 times more volatile than First Foundation Total. It trades about 0.12 of its total potential returns per unit of risk. First Foundation Total is currently generating about 0.22 per unit of volatility. If you would invest  2,599  in First Foundation Total on May 3, 2025 and sell it today you would earn a total of  207.00  from holding First Foundation Total or generate 7.96% return on investment over 90 days.

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

Dreyfus International Equity  vs.  First Foundation Total

Dreyfus International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus International Equity are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dreyfus International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

First Foundation Total

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Foundation Total are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, First Foundation may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Dreyfus International and First Foundation

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

The idea behind Dreyfus International Equity and First Foundation Total 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.