Correlation Between Ab Global and Dreyfus Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Global and Dreyfus Municipal 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 Ab Global and Dreyfus Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Bond and Dreyfus Municipal Bond, you can compare the effects of market volatilities on Ab Global and Dreyfus Municipal 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 Ab Global with a short position of Dreyfus Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Dreyfus Municipal.
Diversification Opportunities for Ab Global and Dreyfus Municipal
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ANAZX and Dreyfus is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Dreyfus Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Municipal Bond and Ab 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 Ab Global Bond are associated (or correlated) with Dreyfus Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Municipal Bond has no effect on the direction of Ab Global i.e., Ab Global and Dreyfus Municipal go up and down completely randomly.
Pair Corralation between Ab Global and Dreyfus Municipal
Assuming the 90 days horizon Ab Global Bond is expected to under-perform the Dreyfus Municipal. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ab Global Bond is 1.59 times less risky than Dreyfus Municipal. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Dreyfus Municipal Bond is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,209 in Dreyfus Municipal Bond on August 25, 2024 and sell it today you would earn a total of 14.00 from holding Dreyfus Municipal Bond or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ab Global Bond vs. Dreyfus Municipal Bond
Performance |
| Timeline |
| Ab Global Bond |
| Dreyfus Municipal Bond |
Ab Global and Dreyfus Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Dreyfus Municipal
The main advantage of trading using opposite Ab Global and Dreyfus Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Dreyfus Municipal 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 Municipal will offset losses from the drop in Dreyfus Municipal's long position.| Ab Global vs. Deutsche Health And | Ab Global vs. Prudential Health Sciences | Ab Global vs. Blackrock Health Sciences | Ab Global vs. Tekla Healthcare Opportunities |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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