Correlation Between Dreyfus Amt-free and Dreyfus Municipal
Can any of the company-specific risk be diversified away by investing in both Dreyfus Amt-free 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 Dreyfus Amt-free and Dreyfus Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Amt Free Municipal and Dreyfus Municipal Bond, you can compare the effects of market volatilities on Dreyfus Amt-free 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 Dreyfus Amt-free with a short position of Dreyfus Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Amt-free and Dreyfus Municipal.
Diversification Opportunities for Dreyfus Amt-free and Dreyfus Municipal
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Amt Free Municipal 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 Dreyfus Amt-free 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 Amt Free Municipal 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 Dreyfus Amt-free i.e., Dreyfus Amt-free and Dreyfus Municipal go up and down completely randomly.
Pair Corralation between Dreyfus Amt-free and Dreyfus Municipal
Assuming the 90 days horizon Dreyfus Amt Free Municipal is expected to generate 0.97 times more return on investment than Dreyfus Municipal. However, Dreyfus Amt Free Municipal is 1.03 times less risky than Dreyfus Municipal. It trades about 0.06 of its potential returns per unit of risk. Dreyfus Municipal Bond is currently generating about 0.05 per unit of risk. If you would invest 1,267 in Dreyfus Amt Free Municipal on August 25, 2024 and sell it today you would earn a total of 77.00 from holding Dreyfus Amt Free Municipal or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Amt Free Municipal vs. Dreyfus Municipal Bond
Performance |
| Timeline |
| Dreyfus Amt Free |
| Dreyfus Municipal Bond |
Dreyfus Amt-free and Dreyfus Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Amt-free and Dreyfus Municipal
The main advantage of trading using opposite Dreyfus Amt-free and Dreyfus Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Amt-free 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.| Dreyfus Amt-free vs. Transamerica Funds | Dreyfus Amt-free vs. Cref Money Market | Dreyfus Amt-free vs. Ubs Money Series | Dreyfus Amt-free vs. Chestnut Street Exchange |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |