Correlation Between Us Strategic and Dreyfus Municipal
Can any of the company-specific risk be diversified away by investing in both Us Strategic 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 Us Strategic and Dreyfus Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Strategic Equity and Dreyfus Municipal Bond, you can compare the effects of market volatilities on Us Strategic 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 Us Strategic with a short position of Dreyfus Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Strategic and Dreyfus Municipal.
Diversification Opportunities for Us Strategic and Dreyfus Municipal
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between RUSTX and Dreyfus is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Us Strategic Equity 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 Us Strategic 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 Us Strategic Equity 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 Us Strategic i.e., Us Strategic and Dreyfus Municipal go up and down completely randomly.
Pair Corralation between Us Strategic and Dreyfus Municipal
Assuming the 90 days horizon Us Strategic Equity is expected to generate 3.17 times more return on investment than Dreyfus Municipal. However, Us Strategic is 3.17 times more volatile than Dreyfus Municipal Bond. It trades about 0.15 of its potential returns per unit of risk. Dreyfus Municipal Bond is currently generating about 0.15 per unit of risk. If you would invest 1,364 in Us Strategic Equity on September 4, 2024 and sell it today you would earn a total of 527.00 from holding Us Strategic Equity or generate 38.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.66% |
| Values | Daily Returns |
Us Strategic Equity vs. Dreyfus Municipal Bond
Performance |
| Timeline |
| Us Strategic Equity |
| Dreyfus Municipal Bond |
Us Strategic and Dreyfus Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Strategic and Dreyfus Municipal
The main advantage of trading using opposite Us Strategic and Dreyfus Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Strategic 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.| Us Strategic vs. Dreyfus Natural Resources | Us Strategic vs. Adams Natural Resources | Us Strategic vs. Icon Natural Resources | Us Strategic vs. Calvert Global Energy |
| Dreyfus Municipal vs. Dreyfusstandish Global Fixed | Dreyfus Municipal vs. Dreyfusstandish Global Fixed | Dreyfus Municipal vs. Dreyfus High Yield | Dreyfus Municipal 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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