Correlation Between Armada Hflr and Dreyfus Municipal
Can any of the company-specific risk be diversified away by investing in both Armada Hflr 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 Armada Hflr and Dreyfus Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armada Hflr Pr and Dreyfus Municipal Bond, you can compare the effects of market volatilities on Armada Hflr 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 Armada Hflr with a short position of Dreyfus Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Dreyfus Municipal.
Diversification Opportunities for Armada Hflr and Dreyfus Municipal
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Armada and Dreyfus is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr 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 Armada Hflr 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 Armada Hflr Pr 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 Armada Hflr i.e., Armada Hflr and Dreyfus Municipal go up and down completely randomly.
Pair Corralation between Armada Hflr and Dreyfus Municipal
Considering the 90-day investment horizon Armada Hflr is expected to generate 1.79 times less return on investment than Dreyfus Municipal. In addition to that, Armada Hflr is 7.88 times more volatile than Dreyfus Municipal Bond. It trades about 0.01 of its total potential returns per unit of risk. Dreyfus Municipal Bond is currently generating about 0.09 per unit of volatility. If you would invest 1,046 in Dreyfus Municipal Bond on September 25, 2024 and sell it today you would earn a total of 28.00 from holding Dreyfus Municipal Bond or generate 2.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 27.97% |
Values | Daily Returns |
Armada Hflr Pr vs. Dreyfus Municipal Bond
Performance |
Timeline |
Armada Hflr Pr |
Dreyfus Municipal Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Armada Hflr and Dreyfus Municipal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Armada Hflr and Dreyfus Municipal
The main advantage of trading using opposite Armada Hflr and Dreyfus Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr 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.Armada Hflr vs. Modiv Inc | Armada Hflr vs. Precinct Properties New | Armada Hflr vs. Global Net Lease | Armada Hflr vs. NexPoint Diversified Real |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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