Correlation Between Dreyfus/the Boston and Oklahoma Municipal
Can any of the company-specific risk be diversified away by investing in both Dreyfus/the Boston and Oklahoma 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 Dreyfus/the Boston and Oklahoma Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfusthe Boston Pany and Oklahoma Municipal Fund, you can compare the effects of market volatilities on Dreyfus/the Boston and Oklahoma 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 Dreyfus/the Boston with a short position of Oklahoma Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus/the Boston and Oklahoma Municipal.
Diversification Opportunities for Dreyfus/the Boston and Oklahoma Municipal
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dreyfus/the and Oklahoma is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfusthe Boston Pany and Oklahoma Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma Municipal and Dreyfus/the Boston 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 Dreyfusthe Boston Pany are associated (or correlated) with Oklahoma Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklahoma Municipal has no effect on the direction of Dreyfus/the Boston i.e., Dreyfus/the Boston and Oklahoma Municipal go up and down completely randomly.
Pair Corralation between Dreyfus/the Boston and Oklahoma Municipal
Assuming the 90 days horizon Dreyfusthe Boston Pany is expected to generate 4.95 times more return on investment than Oklahoma Municipal. However, Dreyfus/the Boston is 4.95 times more volatile than Oklahoma Municipal Fund. It trades about 0.11 of its potential returns per unit of risk. Oklahoma Municipal Fund is currently generating about 0.12 per unit of risk. If you would invest 2,212 in Dreyfusthe Boston Pany on September 1, 2024 and sell it today you would earn a total of 834.00 from holding Dreyfusthe Boston Pany or generate 37.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Dreyfusthe Boston Pany vs. Oklahoma Municipal Fund
Performance |
| Timeline |
| Dreyfusthe Boston Pany |
| Oklahoma Municipal |
Dreyfus/the Boston and Oklahoma Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus/the Boston and Oklahoma Municipal
The main advantage of trading using opposite Dreyfus/the Boston and Oklahoma Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus/the Boston position performs unexpectedly, Oklahoma 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 Oklahoma Municipal will offset losses from the drop in Oklahoma Municipal's long position.| Dreyfus/the Boston vs. Forum Real Estate | Dreyfus/the Boston vs. Jhancock Real Estate | Dreyfus/the Boston vs. Franklin Real Estate | Dreyfus/the Boston vs. Guggenheim Risk Managed |
| Oklahoma Municipal vs. Mesirow Financial Small | Oklahoma Municipal vs. Transamerica Financial Life | Oklahoma Municipal vs. 1919 Financial Services | Oklahoma Municipal vs. Angel Oak Financial |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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