Correlation Between Dreyfus Municipal and Dreyfus/standish
Can any of the company-specific risk be diversified away by investing in both Dreyfus Municipal and Dreyfus/standish 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 Municipal and Dreyfus/standish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Municipal Bond and Dreyfusstandish Global Fixed, you can compare the effects of market volatilities on Dreyfus Municipal and Dreyfus/standish 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 Municipal with a short position of Dreyfus/standish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Municipal and Dreyfus/standish.
Diversification Opportunities for Dreyfus Municipal and Dreyfus/standish
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreyfus and Dreyfus/standish is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Municipal Bond and Dreyfusstandish Global Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfusstandish Global and Dreyfus 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 Dreyfus Municipal Bond are associated (or correlated) with Dreyfus/standish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfusstandish Global has no effect on the direction of Dreyfus Municipal i.e., Dreyfus Municipal and Dreyfus/standish go up and down completely randomly.
Pair Corralation between Dreyfus Municipal and Dreyfus/standish
Assuming the 90 days horizon Dreyfus Municipal is expected to generate 1.34 times less return on investment than Dreyfus/standish. In addition to that, Dreyfus Municipal is 1.04 times more volatile than Dreyfusstandish Global Fixed. It trades about 0.12 of its total potential returns per unit of risk. Dreyfusstandish Global Fixed is currently generating about 0.17 per unit of volatility. If you would invest 1,898 in Dreyfusstandish Global Fixed on September 5, 2024 and sell it today you would earn a total of 86.00 from holding Dreyfusstandish Global Fixed or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Municipal Bond vs. Dreyfusstandish Global Fixed
Performance |
| Timeline |
| Dreyfus Municipal Bond |
| Dreyfusstandish Global |
Dreyfus Municipal and Dreyfus/standish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Municipal and Dreyfus/standish
The main advantage of trading using opposite Dreyfus Municipal and Dreyfus/standish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Municipal position performs unexpectedly, Dreyfus/standish 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/standish will offset losses from the drop in Dreyfus/standish's long position.| Dreyfus Municipal vs. Dreyfusstandish Global Fixed | Dreyfus Municipal vs. Dreyfusstandish Global Fixed | Dreyfus Municipal vs. Dreyfus High Yield | Dreyfus Municipal vs. Dreyfus High Yield |
| Dreyfus/standish vs. Dreyfusstandish Global Fixed | Dreyfus/standish vs. Dreyfus High Yield | Dreyfus/standish vs. Dreyfus High Yield | Dreyfus/standish vs. Dreyfus 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |