Correlation Between Dreyfus High and Dreyfus Municipalome
Can any of the company-specific risk be diversified away by investing in both Dreyfus High and Dreyfus Municipalome 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 High and Dreyfus Municipalome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus High Yield and Dreyfus Municipalome, you can compare the effects of market volatilities on Dreyfus High and Dreyfus Municipalome 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 High with a short position of Dreyfus Municipalome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus High and Dreyfus Municipalome.
Diversification Opportunities for Dreyfus High and Dreyfus Municipalome
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus High Yield and Dreyfus Municipalome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Municipalome and Dreyfus High 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 High Yield are associated (or correlated) with Dreyfus Municipalome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Municipalome has no effect on the direction of Dreyfus High i.e., Dreyfus High and Dreyfus Municipalome go up and down completely randomly.
Pair Corralation between Dreyfus High and Dreyfus Municipalome
Assuming the 90 days horizon Dreyfus High Yield is expected to generate 0.79 times more return on investment than Dreyfus Municipalome. However, Dreyfus High Yield is 1.27 times less risky than Dreyfus Municipalome. It trades about 0.12 of its potential returns per unit of risk. Dreyfus Municipalome is currently generating about 0.08 per unit of risk. If you would invest 1,063 in Dreyfus High Yield on September 2, 2024 and sell it today you would earn a total of 54.00 from holding Dreyfus High Yield or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus High Yield vs. Dreyfus Municipalome
Performance |
| Timeline |
| Dreyfus High Yield |
| Dreyfus Municipalome |
Dreyfus High and Dreyfus Municipalome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus High and Dreyfus Municipalome
The main advantage of trading using opposite Dreyfus High and Dreyfus Municipalome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus High position performs unexpectedly, Dreyfus Municipalome 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 Municipalome will offset losses from the drop in Dreyfus Municipalome's long position.| Dreyfus High vs. The National Tax Free | Dreyfus High vs. Bbh Intermediate Municipal | Dreyfus High vs. Morningstar Municipal Bond | Dreyfus High vs. Ishares Municipal Bond |
| Dreyfus Municipalome vs. Mfs Municipal Income | Dreyfus Municipalome vs. Pioneer Municipal High | Dreyfus Municipalome vs. Dreyfus Strategic Municipal | Dreyfus Municipalome vs. Blackrock Muniassets |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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