Correlation Between Fidelity Municipal and Dreyfus Fund
Can any of the company-specific risk be diversified away by investing in both Fidelity Municipal and Dreyfus Fund 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 Fidelity Municipal and Dreyfus Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Municipal Income and Dreyfus Fund Inc, you can compare the effects of market volatilities on Fidelity Municipal and Dreyfus Fund 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 Fidelity Municipal with a short position of Dreyfus Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Municipal and Dreyfus Fund.
Diversification Opportunities for Fidelity Municipal and Dreyfus Fund
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and DREYFUS is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Municipal Income and Dreyfus Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Fund and Fidelity 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 Fidelity Municipal Income are associated (or correlated) with Dreyfus Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Fund has no effect on the direction of Fidelity Municipal i.e., Fidelity Municipal and Dreyfus Fund go up and down completely randomly.
Pair Corralation between Fidelity Municipal and Dreyfus Fund
Assuming the 90 days horizon Fidelity Municipal is expected to generate 2.97 times less return on investment than Dreyfus Fund. But when comparing it to its historical volatility, Fidelity Municipal Income is 3.04 times less risky than Dreyfus Fund. It trades about 0.14 of its potential returns per unit of risk. Dreyfus Fund Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. 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 |
Fidelity Municipal Income vs. Dreyfus Fund Inc
Performance |
| Timeline |
| Fidelity Municipal Income |
| Dreyfus Fund |
Fidelity Municipal and Dreyfus Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Municipal and Dreyfus Fund
The main advantage of trading using opposite Fidelity Municipal and Dreyfus Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Municipal position performs unexpectedly, Dreyfus Fund 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 Dreyfus Fund will offset losses from the drop in Dreyfus Fund's long position.| Fidelity Municipal vs. Fidelity Freedom 2015 | Fidelity Municipal vs. Fidelity Puritan Fund | Fidelity Municipal vs. Fidelity Puritan Fund | Fidelity Municipal vs. Fidelity Pennsylvania Municipal |
| Dreyfus Fund vs. Dreyfusstandish Global Fixed | Dreyfus Fund vs. Dreyfusstandish Global Fixed | Dreyfus Fund vs. Dreyfus High Yield | Dreyfus Fund vs. Dreyfus High Yield |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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