Correlation Between Dreyfus Government and Thrivent Municipal
Can any of the company-specific risk be diversified away by investing in both Dreyfus Government and Thrivent 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 Dreyfus Government and Thrivent Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Government Cash and Thrivent Municipal Bond, you can compare the effects of market volatilities on Dreyfus Government and Thrivent 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 Dreyfus Government with a short position of Thrivent Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Government and Thrivent Municipal.
Diversification Opportunities for Dreyfus Government and Thrivent Municipal
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dreyfus and Thrivent is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Government Cash and Thrivent Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Municipal Bond and Dreyfus Government 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 Government Cash are associated (or correlated) with Thrivent Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Municipal Bond has no effect on the direction of Dreyfus Government i.e., Dreyfus Government and Thrivent Municipal go up and down completely randomly.
Pair Corralation between Dreyfus Government and Thrivent Municipal
Assuming the 90 days horizon Dreyfus Government is expected to generate 1.95 times less return on investment than Thrivent Municipal. In addition to that, Dreyfus Government is 1.13 times more volatile than Thrivent Municipal Bond. It trades about 0.06 of its total potential returns per unit of risk. Thrivent Municipal Bond is currently generating about 0.13 per unit of volatility. If you would invest 1,001 in Thrivent Municipal Bond on September 2, 2024 and sell it today you would earn a total of 40.00 from holding Thrivent Municipal Bond or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Dreyfus Government Cash vs. Thrivent Municipal Bond
Performance |
| Timeline |
| Dreyfus Government Cash |
| Thrivent Municipal Bond |
Dreyfus Government and Thrivent Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Government and Thrivent Municipal
The main advantage of trading using opposite Dreyfus Government and Thrivent Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Government position performs unexpectedly, Thrivent 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 Thrivent Municipal will offset losses from the drop in Thrivent Municipal's long position.| Dreyfus Government vs. Balanced Fund Investor | Dreyfus Government vs. Aam Select Income | Dreyfus Government vs. Fabxx | Dreyfus Government vs. Falcon Focus Scv |
| Thrivent Municipal vs. Thrivent Partner Worldwide | Thrivent Municipal vs. Thrivent Partner Worldwide | Thrivent Municipal vs. Thrivent Large Cap | Thrivent Municipal vs. Thrivent Limited Maturity |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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