Correlation Between Dreyfus Municipal and Nationwide Global
Can any of the company-specific risk be diversified away by investing in both Dreyfus Municipal and Nationwide Global 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 Municipal and Nationwide Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Municipal Bond and Nationwide Global Equity, you can compare the effects of market volatilities on Dreyfus Municipal and Nationwide Global 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 Municipal with a short position of Nationwide Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Municipal and Nationwide Global.
Diversification Opportunities for Dreyfus Municipal and Nationwide Global
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreyfus and Nationwide is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Municipal Bond and Nationwide Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Global Equity and Dreyfus 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 Dreyfus Municipal Bond are associated (or correlated) with Nationwide Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Global Equity has no effect on the direction of Dreyfus Municipal i.e., Dreyfus Municipal and Nationwide Global go up and down completely randomly.
Pair Corralation between Dreyfus Municipal and Nationwide Global
Assuming the 90 days horizon Dreyfus Municipal Bond is expected to generate 0.44 times more return on investment than Nationwide Global. However, Dreyfus Municipal Bond is 2.26 times less risky than Nationwide Global. It trades about -0.04 of its potential returns per unit of risk. Nationwide Global Equity is currently generating about -0.04 per unit of risk. If you would invest 1,201 in Dreyfus Municipal Bond on October 24, 2024 and sell it today you would lose (15.00) from holding Dreyfus Municipal Bond or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Dreyfus Municipal Bond vs. Nationwide Global Equity
Performance |
| Timeline |
| Dreyfus Municipal Bond |
| Nationwide Global Equity |
Dreyfus Municipal and Nationwide Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Municipal and Nationwide Global
The main advantage of trading using opposite Dreyfus Municipal and Nationwide Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Municipal position performs unexpectedly, Nationwide Global 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 Nationwide Global will offset losses from the drop in Nationwide Global's long position.| Dreyfus Municipal vs. Siit High Yield | Dreyfus Municipal vs. Needham Aggressive Growth | Dreyfus Municipal vs. Dunham High Yield | Dreyfus Municipal vs. Catalystsmh High Income |
| Nationwide Global vs. Msift High Yield | Nationwide Global vs. Voya High Yield | Nationwide Global vs. Lord Abbett Short | Nationwide Global vs. Buffalo 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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