Correlation Between Dreyfus Amt and Vanguard Intermediate-ter
Can any of the company-specific risk be diversified away by investing in both Dreyfus Amt and Vanguard Intermediate-ter 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 and Vanguard Intermediate-ter 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 Vanguard Intermediate Term Tax Exempt, you can compare the effects of market volatilities on Dreyfus Amt and Vanguard Intermediate-ter 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 with a short position of Vanguard Intermediate-ter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Amt and Vanguard Intermediate-ter.
Diversification Opportunities for Dreyfus Amt and Vanguard Intermediate-ter
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dreyfus and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Amt Free Municipal and Vanguard Intermediate Term Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Intermediate-ter and Dreyfus Amt 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 Vanguard Intermediate-ter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Intermediate-ter has no effect on the direction of Dreyfus Amt i.e., Dreyfus Amt and Vanguard Intermediate-ter go up and down completely randomly.
Pair Corralation between Dreyfus Amt and Vanguard Intermediate-ter
Assuming the 90 days horizon Dreyfus Amt Free Municipal is expected to generate 1.31 times more return on investment than Vanguard Intermediate-ter. However, Dreyfus Amt is 1.31 times more volatile than Vanguard Intermediate Term Tax Exempt. It trades about 0.2 of its potential returns per unit of risk. Vanguard Intermediate Term Tax Exempt is currently generating about 0.21 per unit of risk. If you would invest 1,330 in Dreyfus Amt Free Municipal on December 1, 2024 and sell it today you would earn a total of 12.00 from holding Dreyfus Amt Free Municipal or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Amt Free Municipal vs. Vanguard Intermediate Term Tax
Performance |
| Timeline |
| Dreyfus Amt Free |
| Vanguard Intermediate-ter |
Dreyfus Amt and Vanguard Intermediate-ter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Amt and Vanguard Intermediate-ter
The main advantage of trading using opposite Dreyfus Amt and Vanguard Intermediate-ter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Amt position performs unexpectedly, Vanguard Intermediate-ter 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 Vanguard Intermediate-ter will offset losses from the drop in Vanguard Intermediate-ter's long position.| Dreyfus Amt vs. Aig Government Money | Dreyfus Amt vs. Franklin Government Money | Dreyfus Amt vs. Tiaa Cref Funds | Dreyfus Amt vs. Dreyfus Institutional Reserves |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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