Correlation Between Dreyfus Municipal and Fidelity Limited
Can any of the company-specific risk be diversified away by investing in both Dreyfus Municipal and Fidelity Limited 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 Fidelity Limited 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 Fidelity Limited Term, you can compare the effects of market volatilities on Dreyfus Municipal and Fidelity Limited 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 Fidelity Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Municipal and Fidelity Limited.
Diversification Opportunities for Dreyfus Municipal and Fidelity Limited
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dreyfus and Fidelity is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Municipal Bond and Fidelity Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Limited Term 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 Fidelity Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Limited Term has no effect on the direction of Dreyfus Municipal i.e., Dreyfus Municipal and Fidelity Limited go up and down completely randomly.
Pair Corralation between Dreyfus Municipal and Fidelity Limited
If you would invest 1,040 in Fidelity Limited Term on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Fidelity Limited Term or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Dreyfus Municipal Bond vs. Fidelity Limited Term
Performance |
| Timeline |
| Dreyfus Municipal Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fidelity Limited Term |
Dreyfus Municipal and Fidelity Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Municipal and Fidelity Limited
The main advantage of trading using opposite Dreyfus Municipal and Fidelity Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Municipal position performs unexpectedly, Fidelity Limited 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 Limited will offset losses from the drop in Fidelity Limited's long position.| Dreyfus Municipal vs. Dreyfus Intermediate Municipal | Dreyfus Municipal vs. Dreyfus Gnma Fund | Dreyfus Municipal vs. Fidelity Municipal Income | Dreyfus Municipal vs. T Rowe Price |
| Fidelity Limited vs. Fidelity Intermediate Municipal | Fidelity Limited vs. Fidelity Municipal Income | Fidelity Limited vs. Fidelity Tax Free Bond | Fidelity Limited vs. Fidelity Short Term Bond |
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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