Correlation Between Dreyfus High and Dreyfus Amt
Can any of the company-specific risk be diversified away by investing in both Dreyfus High and Dreyfus Amt 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 High and Dreyfus Amt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus High Yield and Dreyfus Amt Free Municipal, you can compare the effects of market volatilities on Dreyfus High and Dreyfus Amt 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 High with a short position of Dreyfus Amt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus High and Dreyfus Amt.
Diversification Opportunities for Dreyfus High and Dreyfus Amt
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dreyfus and Dreyfus is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus High Yield and Dreyfus Amt Free Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Amt Free and Dreyfus High 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 High Yield are associated (or correlated) with Dreyfus Amt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Amt Free has no effect on the direction of Dreyfus High i.e., Dreyfus High and Dreyfus Amt go up and down completely randomly.
Pair Corralation between Dreyfus High and Dreyfus Amt
Assuming the 90 days horizon Dreyfus High Yield is expected to under-perform the Dreyfus Amt. In addition to that, Dreyfus High is 1.4 times more volatile than Dreyfus Amt Free Municipal. It trades about -0.3 of its total potential returns per unit of risk. Dreyfus Amt Free Municipal is currently generating about -0.26 per unit of volatility. If you would invest 1,348 in Dreyfus Amt Free Municipal on September 24, 2024 and sell it today you would lose (19.00) from holding Dreyfus Amt Free Municipal or give up 1.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dreyfus High Yield vs. Dreyfus Amt Free Municipal
Performance |
Timeline |
Dreyfus High Yield |
Dreyfus Amt Free |
Dreyfus High and Dreyfus Amt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dreyfus High and Dreyfus Amt
The main advantage of trading using opposite Dreyfus High and Dreyfus Amt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus High position performs unexpectedly, Dreyfus Amt 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 Amt will offset losses from the drop in Dreyfus Amt's long position.Dreyfus High vs. Dreyfusthe Boston Pany | Dreyfus High vs. Dreyfus International Bond | Dreyfus High vs. Dreyfus International Bond | Dreyfus High vs. Dreyfus International Equity |
Dreyfus Amt vs. Dreyfus High Yield | Dreyfus Amt vs. Dreyfusthe Boston Pany | Dreyfus Amt vs. Dreyfus International Bond | Dreyfus Amt vs. Dreyfus International Bond |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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