Correlation Between International Stock and Dreyfus/the Boston

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

By analyzing existing cross correlation between International Stock Fund and Dreyfusthe Boston Pany, you can compare the effects of market volatilities on International Stock and Dreyfus/the Boston 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 International Stock with a short position of Dreyfus/the Boston. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Stock and Dreyfus/the Boston.

Diversification Opportunities for International Stock and Dreyfus/the Boston

-0.68

Correlation Coefficient

International Stock  Dreyfus/the Boston

Excellent diversification

The 3 months correlation between International and Dreyfus/the is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding International Stock Fund and Dreyfusthe Boston Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfusthe Boston Pany and International Stock 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 International Stock Fund are associated (or correlated) with Dreyfus/the Boston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfusthe Boston Pany has no effect on the direction of International Stock i.e., International Stock and Dreyfus/the Boston go up and down completely randomly.

Pair Corralation between International Stock and Dreyfus/the Boston

Assuming the 90 days horizon International Stock Fund is expected to under-perform the Dreyfus/the Boston. But the mutual fund apears to be less risky and, when comparing its historical volatility, International Stock Fund is 1.21 times less risky than Dreyfus/the Boston. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Dreyfusthe Boston Pany is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  3,615  in Dreyfusthe Boston Pany on September 3, 2024 and sell it today you would earn a total of  686.00  from holding Dreyfusthe Boston Pany or generate 18.98% return on investment over 90 days.

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

International Stock Fund  vs.  Dreyfusthe Boston Pany

International Stock

Risk-Adjusted Performance

0 of 100

Very Weak

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

Dreyfusthe Boston Pany

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfusthe Boston Pany are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dreyfus/the Boston showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with International Stock and Dreyfus/the Boston

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

The idea behind International Stock Fund and Dreyfusthe Boston Pany 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.