Correlation Between Dreyfus Municipalome and Dreyfus New
Can any of the company-specific risk be diversified away by investing in both Dreyfus Municipalome and Dreyfus New 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 Municipalome and Dreyfus New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Municipalome and Dreyfus New York, you can compare the effects of market volatilities on Dreyfus Municipalome and Dreyfus New 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 Municipalome with a short position of Dreyfus New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Municipalome and Dreyfus New.
Diversification Opportunities for Dreyfus Municipalome and Dreyfus New
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Municipalome and Dreyfus New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus New York and Dreyfus Municipalome 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 Municipalome are associated (or correlated) with Dreyfus New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus New York has no effect on the direction of Dreyfus Municipalome i.e., Dreyfus Municipalome and Dreyfus New go up and down completely randomly.
Pair Corralation between Dreyfus Municipalome and Dreyfus New
Assuming the 90 days horizon Dreyfus Municipalome is expected to generate 1.93 times more return on investment than Dreyfus New. However, Dreyfus Municipalome is 1.93 times more volatile than Dreyfus New York. It trades about 0.08 of its potential returns per unit of risk. Dreyfus New York is currently generating about 0.11 per unit of risk. If you would invest 755.00 in Dreyfus Municipalome on September 2, 2024 and sell it today you would earn a total of 31.00 from holding Dreyfus Municipalome or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Municipalome vs. Dreyfus New York
Performance |
| Timeline |
| Dreyfus Municipalome |
| Dreyfus New York |
Dreyfus Municipalome and Dreyfus New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Municipalome and Dreyfus New
The main advantage of trading using opposite Dreyfus Municipalome and Dreyfus New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Municipalome position performs unexpectedly, Dreyfus New 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 New will offset losses from the drop in Dreyfus New's long position.| Dreyfus Municipalome vs. Mfs Municipal Income | Dreyfus Municipalome vs. Pioneer Municipal High | Dreyfus Municipalome vs. Dreyfus Strategic Municipal | Dreyfus Municipalome vs. Blackrock Muniassets |
| Dreyfus New vs. Dreyfusstandish Global Fixed | Dreyfus New vs. Dreyfusstandish Global Fixed | Dreyfus New vs. Dreyfus High Yield | Dreyfus New 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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