Correlation Between Ab Municipal and Dreyfus High
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Dreyfus High 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 Municipal and Dreyfus High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Municipal Bond and Dreyfus High Yield, you can compare the effects of market volatilities on Ab Municipal and Dreyfus High 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 Municipal with a short position of Dreyfus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Dreyfus High.
Diversification Opportunities for Ab Municipal and Dreyfus High
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUNCX and Dreyfus is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Dreyfus High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus High Yield and Ab Municipal 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 Municipal Bond are associated (or correlated) with Dreyfus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus High Yield has no effect on the direction of Ab Municipal i.e., Ab Municipal and Dreyfus High go up and down completely randomly.
Pair Corralation between Ab Municipal and Dreyfus High
Assuming the 90 days horizon Ab Municipal Bond is expected to generate 0.8 times more return on investment than Dreyfus High. However, Ab Municipal Bond is 1.24 times less risky than Dreyfus High. It trades about 0.27 of its potential returns per unit of risk. Dreyfus High Yield is currently generating about 0.16 per unit of risk. If you would invest 1,074 in Ab Municipal Bond on November 27, 2024 and sell it today you would earn a total of 8.00 from holding Ab Municipal Bond or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Dreyfus High Yield
Performance |
| Timeline |
| Ab Municipal Bond |
| Dreyfus High Yield |
Ab Municipal and Dreyfus High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Dreyfus High
The main advantage of trading using opposite Ab Municipal and Dreyfus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Dreyfus High 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 High will offset losses from the drop in Dreyfus High's long position.| Ab Municipal vs. Transamerica Asset Allocation | Ab Municipal vs. Rational Defensive Growth | Ab Municipal vs. Jpmorgan Large Cap | Ab Municipal vs. Oklahoma College Savings |
| Dreyfus High vs. Neuberger Berman Income | Dreyfus High vs. Virtus High Yield | Dreyfus High vs. Pace High Yield | Dreyfus High vs. Prudential High Yield |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |