Correlation Between Dreyfus Government and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Dreyfus Government and Invesco 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 Invesco 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 Invesco Municipal Income, you can compare the effects of market volatilities on Dreyfus Government and Invesco 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 Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Government and Invesco Municipal.
Diversification Opportunities for Dreyfus Government and Invesco Municipal
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dreyfus and Invesco is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Government Cash and Invesco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Income 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 Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Income has no effect on the direction of Dreyfus Government i.e., Dreyfus Government and Invesco Municipal go up and down completely randomly.
Pair Corralation between Dreyfus Government and Invesco Municipal
If you would invest 1,196 in Invesco Municipal Income on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Invesco Municipal Income or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Government Cash vs. Invesco Municipal Income
Performance |
| Timeline |
| Dreyfus Government Cash |
| Invesco Municipal Income |
Dreyfus Government and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Government and Invesco Municipal
The main advantage of trading using opposite Dreyfus Government and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Government position performs unexpectedly, Invesco 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 Invesco Municipal will offset losses from the drop in Invesco Municipal's long position.| Dreyfus Government vs. Blrc Sgy Mnp | Dreyfus Government vs. Ms Global Fixed | Dreyfus Government vs. Touchstone Premium Yield | Dreyfus Government vs. Maryland Tax Free Bond |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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