Correlation Between James Aggressive and Dreyfus Natural

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

By analyzing existing cross correlation between James Aggressive Allocation and Dreyfus Natural Resources, you can compare the effects of market volatilities on James Aggressive and Dreyfus Natural 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 James Aggressive with a short position of Dreyfus Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Aggressive and Dreyfus Natural.

Diversification Opportunities for James Aggressive and Dreyfus Natural

0.92

Correlation Coefficient

James Aggressive  Dreyfus Natural

Almost no diversification

The 3 months correlation between James and Dreyfus is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding James Aggressive Allocation and Dreyfus Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Natural Resources and James Aggressive 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 James Aggressive Allocation are associated (or correlated) with Dreyfus Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Natural Resources has no effect on the direction of James Aggressive i.e., James Aggressive and Dreyfus Natural go up and down completely randomly.

Pair Corralation between James Aggressive and Dreyfus Natural

Assuming the 90 days horizon James Aggressive Allocation is expected to generate 0.42 times more return on investment than Dreyfus Natural. However, James Aggressive Allocation is 2.39 times less risky than Dreyfus Natural. It trades about 0.08 of its potential returns per unit of risk. Dreyfus Natural Resources is currently generating about -0.1 per unit of risk. If you would invest  1,491  in James Aggressive Allocation on May 5, 2025 and sell it today you would earn a total of  11.00  from holding James Aggressive Allocation or generate 0.74% return on investment over 90 days.

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

James Aggressive Allocation  vs.  Dreyfus Natural Resources

James Aggressive All

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in James Aggressive Allocation are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, James Aggressive may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Dreyfus Natural Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Natural Resources are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dreyfus Natural may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with James Aggressive and Dreyfus Natural

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

The idea behind James Aggressive Allocation and Dreyfus Natural Resources 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.