Correlation Between Dreyfus Fund and Fidelity Municipal
Can any of the company-specific risk be diversified away by investing in both Dreyfus Fund and Fidelity 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 Fund and Fidelity Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Fund Inc and Fidelity Municipal Income, you can compare the effects of market volatilities on Dreyfus Fund and Fidelity 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 Fund with a short position of Fidelity Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Fund and Fidelity Municipal.
Diversification Opportunities for Dreyfus Fund and Fidelity Municipal
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DREYFUS and Fidelity is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Fund Inc and Fidelity Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Municipal Income and Dreyfus Fund 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 Fund Inc are associated (or correlated) with Fidelity Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Municipal Income has no effect on the direction of Dreyfus Fund i.e., Dreyfus Fund and Fidelity Municipal go up and down completely randomly.
Pair Corralation between Dreyfus Fund and Fidelity Municipal
Assuming the 90 days horizon Dreyfus Fund Inc is expected to generate 3.04 times more return on investment than Fidelity Municipal. However, Dreyfus Fund is 3.04 times more volatile than Fidelity Municipal Income. It trades about 0.14 of its potential returns per unit of risk. Fidelity Municipal Income is currently generating about 0.14 per unit of risk. If you would invest 2,039 in Dreyfus Fund Inc on August 25, 2024 and sell it today you would earn a total of 59.00 from holding Dreyfus Fund Inc or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Fund Inc vs. Fidelity Municipal Income
Performance |
| Timeline |
| Dreyfus Fund |
| Fidelity Municipal Income |
Dreyfus Fund and Fidelity Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Fund and Fidelity Municipal
The main advantage of trading using opposite Dreyfus Fund and Fidelity Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Fund position performs unexpectedly, Fidelity 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 Fidelity Municipal will offset losses from the drop in Fidelity Municipal's long position.| Dreyfus Fund vs. Dreyfusstandish Global Fixed | Dreyfus Fund vs. Dreyfusstandish Global Fixed | Dreyfus Fund vs. Dreyfus High Yield | Dreyfus Fund vs. Dreyfus High Yield |
| Fidelity Municipal vs. Fidelity Freedom 2015 | Fidelity Municipal vs. Fidelity Puritan Fund | Fidelity Municipal vs. Fidelity Puritan Fund | Fidelity Municipal vs. Fidelity Pennsylvania Municipal |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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