Correlation Between Dreyfus New and New Jersey
Can any of the company-specific risk be diversified away by investing in both Dreyfus New and New Jersey 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 New and New Jersey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus New Jersey and New Jersey Tax Free, you can compare the effects of market volatilities on Dreyfus New and New Jersey 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 New with a short position of New Jersey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus New and New Jersey.
Diversification Opportunities for Dreyfus New and New Jersey
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dreyfus and New is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus New Jersey and New Jersey Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Jersey Tax and Dreyfus New 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 New Jersey are associated (or correlated) with New Jersey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Jersey Tax has no effect on the direction of Dreyfus New i.e., Dreyfus New and New Jersey go up and down completely randomly.
Pair Corralation between Dreyfus New and New Jersey
Assuming the 90 days horizon Dreyfus New Jersey is expected to generate 1.12 times more return on investment than New Jersey. However, Dreyfus New is 1.12 times more volatile than New Jersey Tax Free. It trades about 0.16 of its potential returns per unit of risk. New Jersey Tax Free is currently generating about 0.18 per unit of risk. If you would invest 1,177 in Dreyfus New Jersey on August 29, 2024 and sell it today you would earn a total of 14.00 from holding Dreyfus New Jersey or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus New Jersey vs. New Jersey Tax Free
Performance |
| Timeline |
| Dreyfus New Jersey |
| New Jersey Tax |
Dreyfus New and New Jersey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus New and New Jersey
The main advantage of trading using opposite Dreyfus New and New Jersey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus New position performs unexpectedly, New Jersey 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 New Jersey will offset losses from the drop in New Jersey's long position.| Dreyfus New vs. Dreyfus Global Equity | Dreyfus New vs. Dreyfus Institutional Reserves | Dreyfus New vs. Dreyfus Equity Income | Dreyfus New vs. Dreyfus Equity Income |
| New Jersey vs. Kinetics Global Fund | New Jersey vs. Massmutual Premier Global | New Jersey vs. Morgan Stanley Global | New Jersey vs. T Rowe Price |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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