Correlation Between Cref Inflation-linked and Dreyfus Municipal
Can any of the company-specific risk be diversified away by investing in both Cref Inflation-linked 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 Cref Inflation-linked and Dreyfus Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Inflation Linked Bond and Dreyfus Municipal Bond, you can compare the effects of market volatilities on Cref Inflation-linked 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 Cref Inflation-linked with a short position of Dreyfus Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Inflation-linked and Dreyfus Municipal.
Diversification Opportunities for Cref Inflation-linked and Dreyfus Municipal
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cref and Dreyfus is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cref Inflation Linked Bond 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 Cref Inflation-linked 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 Cref Inflation Linked Bond 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 Cref Inflation-linked i.e., Cref Inflation-linked and Dreyfus Municipal go up and down completely randomly.
Pair Corralation between Cref Inflation-linked and Dreyfus Municipal
Assuming the 90 days trading horizon Cref Inflation Linked Bond is expected to generate 0.42 times more return on investment than Dreyfus Municipal. However, Cref Inflation Linked Bond is 2.4 times less risky than Dreyfus Municipal. It trades about 0.3 of its potential returns per unit of risk. Dreyfus Municipal Bond is currently generating about -0.06 per unit of risk. If you would invest 8,481 in Cref Inflation Linked Bond on November 4, 2024 and sell it today you would earn a total of 89.00 from holding Cref Inflation Linked Bond or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cref Inflation Linked Bond vs. Dreyfus Municipal Bond
Performance |
| Timeline |
| Cref Inflation Linked |
| Dreyfus Municipal Bond |
Cref Inflation-linked and Dreyfus Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Inflation-linked and Dreyfus Municipal
The main advantage of trading using opposite Cref Inflation-linked and Dreyfus Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Inflation-linked 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.| Cref Inflation-linked vs. Ab Bond Inflation | Cref Inflation-linked vs. Goldman Sachs Short | Cref Inflation-linked vs. Angel Oak Financial | Cref Inflation-linked vs. Versatile Bond Portfolio |
| Dreyfus Municipal vs. Morgan Stanley Emerging | Dreyfus Municipal vs. Dodge Cox Emerging | Dreyfus Municipal vs. Eagle Mlp Strategy | Dreyfus Municipal vs. Nasdaq 100 2x Strategy |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |