Correlation Between Dreyfus Institutional and Global Gold
Can any of the company-specific risk be diversified away by investing in both Dreyfus Institutional and Global Gold 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 Institutional and Global Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Institutional Sp and Global Gold Fund, you can compare the effects of market volatilities on Dreyfus Institutional and Global Gold 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 Institutional with a short position of Global Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Institutional and Global Gold.
Diversification Opportunities for Dreyfus Institutional and Global Gold
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dreyfus and Global is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Institutional Sp and Global Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Gold Fund and Dreyfus Institutional 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 Institutional Sp are associated (or correlated) with Global Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Gold Fund has no effect on the direction of Dreyfus Institutional i.e., Dreyfus Institutional and Global Gold go up and down completely randomly.
Pair Corralation between Dreyfus Institutional and Global Gold
Assuming the 90 days horizon Dreyfus Institutional is expected to generate 3.9 times less return on investment than Global Gold. But when comparing it to its historical volatility, Dreyfus Institutional Sp is 3.35 times less risky than Global Gold. It trades about 0.14 of its potential returns per unit of risk. Global Gold Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,303 in Global Gold Fund on August 31, 2025 and sell it today you would earn a total of 654.00 from holding Global Gold Fund or generate 28.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Institutional Sp vs. Global Gold Fund
Performance |
| Timeline |
| Dreyfus Institutional |
| Global Gold Fund |
Dreyfus Institutional and Global Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Institutional and Global Gold
The main advantage of trading using opposite Dreyfus Institutional and Global Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Institutional position performs unexpectedly, Global Gold 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 Global Gold will offset losses from the drop in Global Gold's long position.The idea behind Dreyfus Institutional Sp and Global Gold Fund 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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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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