Correlation Between Fidelity Limited and Dreyfus Gnma
Can any of the company-specific risk be diversified away by investing in both Fidelity Limited and Dreyfus Gnma 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 Limited and Dreyfus Gnma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Limited Term and Dreyfus Gnma Fund, you can compare the effects of market volatilities on Fidelity Limited and Dreyfus Gnma 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 Limited with a short position of Dreyfus Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Limited and Dreyfus Gnma.
Diversification Opportunities for Fidelity Limited and Dreyfus Gnma
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Dreyfus is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Limited Term and Dreyfus Gnma Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Gnma and Fidelity Limited 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 Limited Term are associated (or correlated) with Dreyfus Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Gnma has no effect on the direction of Fidelity Limited i.e., Fidelity Limited and Dreyfus Gnma go up and down completely randomly.
Pair Corralation between Fidelity Limited and Dreyfus Gnma
Assuming the 90 days horizon Fidelity Limited is expected to generate 2.19 times less return on investment than Dreyfus Gnma. But when comparing it to its historical volatility, Fidelity Limited Term is 2.32 times less risky than Dreyfus Gnma. It trades about 0.16 of its potential returns per unit of risk. Dreyfus Gnma Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,271 in Dreyfus Gnma Fund on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Dreyfus Gnma Fund or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Limited Term vs. Dreyfus Gnma Fund
Performance |
| Timeline |
| Fidelity Limited Term |
| Dreyfus Gnma |
Fidelity Limited and Dreyfus Gnma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Limited and Dreyfus Gnma
The main advantage of trading using opposite Fidelity Limited and Dreyfus Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Limited position performs unexpectedly, Dreyfus Gnma 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 Gnma will offset losses from the drop in Dreyfus Gnma's long position.| 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 |
| Dreyfus Gnma vs. Dreyfusstandish Global Fixed | Dreyfus Gnma vs. Dreyfusstandish Global Fixed | Dreyfus Gnma vs. Dreyfus High Yield | Dreyfus Gnma 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |