Correlation Between Citigroup and Dreyfus Municipal
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and Dreyfus Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Dreyfus Municipal Bond, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of Dreyfus Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dreyfus Municipal.
Diversification Opportunities for Citigroup and Dreyfus Municipal
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Dreyfus is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup 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 Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and Dreyfus Municipal go up and down completely randomly.
Pair Corralation between Citigroup and Dreyfus Municipal
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.38 times more return on investment than Dreyfus Municipal. However, Citigroup is 6.38 times more volatile than Dreyfus Municipal Bond. It trades about 0.21 of its potential returns per unit of risk. Dreyfus Municipal Bond is currently generating about 0.15 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Dreyfus Municipal Bond
Performance |
| Timeline |
| Citigroup |
| Dreyfus Municipal Bond |
Citigroup and Dreyfus Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Dreyfus Municipal
The main advantage of trading using opposite Citigroup and Dreyfus Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.The idea behind Citigroup and Dreyfus Municipal Bond 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.| Dreyfus Municipal vs. Target Retirement 2040 | Dreyfus Municipal vs. Tiaa Cref Lifecycle Retirement | Dreyfus Municipal vs. Calvert Moderate Allocation | Dreyfus Municipal vs. Moderately Aggressive Balanced |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |