Correlation Between DWS Municipal and Urbana
Can any of the company-specific risk be diversified away by investing in both DWS Municipal and Urbana 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 DWS Municipal and Urbana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DWS Municipal Income and Urbana, you can compare the effects of market volatilities on DWS Municipal and Urbana 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 DWS Municipal with a short position of Urbana. Check out your portfolio center. Please also check ongoing floating volatility patterns of DWS Municipal and Urbana.
Diversification Opportunities for DWS Municipal and Urbana
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DWS and Urbana is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding DWS Municipal Income and Urbana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urbana and DWS 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 DWS Municipal Income are associated (or correlated) with Urbana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urbana has no effect on the direction of DWS Municipal i.e., DWS Municipal and Urbana go up and down completely randomly.
Pair Corralation between DWS Municipal and Urbana
Considering the 90-day investment horizon DWS Municipal is expected to generate 1.55 times less return on investment than Urbana. But when comparing it to its historical volatility, DWS Municipal Income is 2.5 times less risky than Urbana. It trades about 0.09 of its potential returns per unit of risk. Urbana is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 298.00 in Urbana on August 31, 2024 and sell it today you would earn a total of 105.00 from holding Urbana or generate 35.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.69% |
| Values | Daily Returns |
DWS Municipal Income vs. Urbana
Performance |
| Timeline |
| DWS Municipal Income |
| Urbana |
DWS Municipal and Urbana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DWS Municipal and Urbana
The main advantage of trading using opposite DWS Municipal and Urbana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DWS Municipal position performs unexpectedly, Urbana 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 Urbana will offset losses from the drop in Urbana's long position.| DWS Municipal vs. DTF Tax Free | DWS Municipal vs. Blackrock Muniyield Quality | DWS Municipal vs. Blackrock Muni Intermediate | DWS Municipal vs. Blackrock Muniholdings Quality |
| Urbana vs. Blackhawk Growth Corp | Urbana vs. Guardian Capital Group | Urbana vs. Flow Capital Corp | Urbana vs. Princeton Capital |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |