Correlation Between Falling Dollar and Dreyfus Large

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

By analyzing existing cross correlation between Falling Dollar Profund and Dreyfus Large Cap, you can compare the effects of market volatilities on Falling Dollar and Dreyfus Large 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 Falling Dollar with a short position of Dreyfus Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falling Dollar and Dreyfus Large.

Diversification Opportunities for Falling Dollar and Dreyfus Large

0.65

Correlation Coefficient

Falling Dollar  Dreyfus Large

Poor diversification

The 3 months correlation between Falling and Dreyfus is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Falling Dollar Profund and Dreyfus Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Large Cap and Falling Dollar 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 Falling Dollar Profund are associated (or correlated) with Dreyfus Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Large Cap has no effect on the direction of Falling Dollar i.e., Falling Dollar and Dreyfus Large go up and down completely randomly.

Pair Corralation between Falling Dollar and Dreyfus Large

Assuming the 90 days horizon Falling Dollar Profund is expected to under-perform the Dreyfus Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Falling Dollar Profund is 1.49 times less risky than Dreyfus Large. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Dreyfus Large Cap is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  1,421  in Dreyfus Large Cap on May 2, 2025 and sell it today you would earn a total of  206.00  from holding Dreyfus Large Cap or generate 14.5% return on investment over 90 days.

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

Falling Dollar Profund  vs.  Dreyfus Large Cap

Falling Dollar Profund

Risk-Adjusted Performance

Very Weak

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

Dreyfus Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Large Cap are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Dreyfus Large showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Falling Dollar and Dreyfus Large

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

The idea behind Falling Dollar Profund and Dreyfus Large Cap 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..