Correlation Between Dreyfus Municipal and Fidelity New
Can any of the company-specific risk be diversified away by investing in both Dreyfus Municipal and Fidelity New 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 New 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 New York, you can compare the effects of market volatilities on Dreyfus Municipal and Fidelity New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Municipal and Fidelity New.
Diversification Opportunities for Dreyfus Municipal and Fidelity New
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dreyfus and Fidelity is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Municipal Bond and Fidelity New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity New York 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity New York has no effect on the direction of Dreyfus Municipal i.e., Dreyfus Municipal and Fidelity New go up and down completely randomly.
Pair Corralation between Dreyfus Municipal and Fidelity New
Assuming the 90 days horizon Dreyfus Municipal is expected to generate 1.18 times less return on investment than Fidelity New. But when comparing it to its historical volatility, Dreyfus Municipal Bond is 1.26 times less risky than Fidelity New. It trades about 0.08 of its potential returns per unit of risk. Fidelity New York is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,141 in Fidelity New York on September 1, 2024 and sell it today you would earn a total of 115.00 from holding Fidelity New York or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.05% |
| Values | Daily Returns |
Dreyfus Municipal Bond vs. Fidelity New York
Performance |
| Timeline |
| Dreyfus Municipal Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fidelity New York |
Dreyfus Municipal and Fidelity New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Municipal and Fidelity New
The main advantage of trading using opposite Dreyfus Municipal and Fidelity New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Municipal position performs unexpectedly, Fidelity New 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 New will offset losses from the drop in Fidelity New'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 New vs. Fidelity Pennsylvania Municipal | Fidelity New vs. Fidelity New Jersey | Fidelity New vs. Fidelity Necticut Municipal | Fidelity New vs. Fidelity Ohio 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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