Correlation Between Ab Bond and Dreyfus Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Bond 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 Ab Bond and Dreyfus Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Dreyfus Municipal Bond, you can compare the effects of market volatilities on Ab Bond 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 Ab Bond with a short position of Dreyfus Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Dreyfus Municipal.
Diversification Opportunities for Ab Bond and Dreyfus Municipal
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ABNTX and Dreyfus is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation 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 Ab Bond 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 Ab Bond Inflation 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 Ab Bond i.e., Ab Bond and Dreyfus Municipal go up and down completely randomly.
Pair Corralation between Ab Bond and Dreyfus Municipal
Assuming the 90 days horizon Ab Bond Inflation is expected to under-perform the Dreyfus Municipal. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ab Bond Inflation is 1.46 times less risky than Dreyfus Municipal. The mutual fund trades about -0.22 of its potential returns per unit of risk. The Dreyfus Municipal Bond is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,226 in Dreyfus Municipal Bond on September 24, 2024 and sell it today you would lose (19.00) from holding Dreyfus Municipal Bond or give up 1.55% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ab Bond Inflation vs. Dreyfus Municipal Bond
Performance |
Timeline |
Ab Bond Inflation |
Dreyfus Municipal Bond |
Ab Bond and Dreyfus Municipal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Bond and Dreyfus Municipal
The main advantage of trading using opposite Ab Bond and Dreyfus Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond 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.Ab Bond vs. Simt Multi Asset Inflation | Ab Bond vs. Aqr Managed Futures | Ab Bond vs. Short Duration Inflation | Ab Bond vs. Western Asset Inflation |
Dreyfus Municipal vs. Ab Bond Inflation | Dreyfus Municipal vs. Ab Bond Inflation | Dreyfus Municipal vs. Western Asset Inflation | Dreyfus Municipal vs. Blackrock Inflation Protected |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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