Correlation Between Fidelity New and Dreyfus Municipal
Can any of the company-specific risk be diversified away by investing in both Fidelity New and Dreyfus 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 Fidelity New and Dreyfus Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity New York and Dreyfus Municipal Bond, you can compare the effects of market volatilities on Fidelity New and Dreyfus 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 Fidelity New with a short position of Dreyfus Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Dreyfus Municipal.
Diversification Opportunities for Fidelity New and Dreyfus Municipal
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Dreyfus is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New York and Dreyfus Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Municipal Bond and Fidelity New 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 New York are associated (or correlated) with Dreyfus Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Municipal Bond has no effect on the direction of Fidelity New i.e., Fidelity New and Dreyfus Municipal go up and down completely randomly.
Pair Corralation between Fidelity New and Dreyfus Municipal
Assuming the 90 days horizon Fidelity New York is expected to generate 1.28 times more return on investment than Dreyfus Municipal. However, Fidelity New is 1.28 times more volatile than Dreyfus Municipal Bond. It trades about 0.07 of its potential returns per unit of risk. Dreyfus Municipal Bond is currently generating about 0.05 per unit of risk. If you would invest 1,160 in Fidelity New York on September 3, 2024 and sell it today you would earn a total of 96.00 from holding Fidelity New York or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.0% |
| Values | Daily Returns |
Fidelity New York vs. Dreyfus Municipal Bond
Performance |
| Timeline |
| Fidelity New York |
| Dreyfus Municipal Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fidelity New and Dreyfus Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity New and Dreyfus Municipal
The main advantage of trading using opposite Fidelity New and Dreyfus Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New position performs unexpectedly, Dreyfus 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 Dreyfus Municipal will offset losses from the drop in Dreyfus Municipal's long position.| Fidelity New vs. Oppenheimer Rochester | Fidelity New vs. Oppenheimer Rochester | Fidelity New vs. Vanguard New York | Fidelity New vs. Vanguard New York |
| Dreyfus Municipal vs. Dreyfus Intermediate Municipal | Dreyfus Municipal vs. Dreyfus Gnma Fund | Dreyfus Municipal vs. Fidelity Municipal Income | Dreyfus Municipal vs. T Rowe Price |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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