Correlation Between Dreyfus Global and Multisector Bond
Can any of the company-specific risk be diversified away by investing in both Dreyfus Global and Multisector Bond 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 Global and Multisector Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Global Real and Multisector Bond Sma, you can compare the effects of market volatilities on Dreyfus Global and Multisector Bond 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 Global with a short position of Multisector Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Global and Multisector Bond.
Diversification Opportunities for Dreyfus Global and Multisector Bond
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus and Multisector is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Global Real and Multisector Bond Sma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multisector Bond Sma and Dreyfus Global 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 Global Real are associated (or correlated) with Multisector Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multisector Bond Sma has no effect on the direction of Dreyfus Global i.e., Dreyfus Global and Multisector Bond go up and down completely randomly.
Pair Corralation between Dreyfus Global and Multisector Bond
Assuming the 90 days horizon Dreyfus Global Real is expected to generate 2.14 times more return on investment than Multisector Bond. However, Dreyfus Global is 2.14 times more volatile than Multisector Bond Sma. It trades about 0.16 of its potential returns per unit of risk. Multisector Bond Sma is currently generating about 0.24 per unit of risk. If you would invest 791.00 in Dreyfus Global Real on April 14, 2025 and sell it today you would earn a total of 59.00 from holding Dreyfus Global Real or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Global Real vs. Multisector Bond Sma
Performance |
| Timeline |
| Dreyfus Global Real |
| Multisector Bond Sma |
Dreyfus Global and Multisector Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Global and Multisector Bond
The main advantage of trading using opposite Dreyfus Global and Multisector Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Global position performs unexpectedly, Multisector Bond 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 Multisector Bond will offset losses from the drop in Multisector Bond's long position.| Dreyfus Global vs. Multisector Bond Sma | Dreyfus Global vs. Versatile Bond Portfolio | Dreyfus Global vs. Franklin Government Money | Dreyfus Global vs. Pace Municipal Fixed |
| Multisector Bond vs. Columbia Porate Income | Multisector Bond vs. Columbia Ultra Short | Multisector Bond vs. Columbia Treasury Index | Multisector Bond vs. Multi Manager Directional Alternative |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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