Correlation Between Dreyfus New and Dreyfus Amt
Can any of the company-specific risk be diversified away by investing in both Dreyfus New 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 New 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 New York and Dreyfus Amt Free Municipal, you can compare the effects of market volatilities on Dreyfus New 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 New with a short position of Dreyfus Amt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus New and Dreyfus Amt.
Diversification Opportunities for Dreyfus New and Dreyfus Amt
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Dreyfus and Dreyfus is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus New York 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 New 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 New York 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 New i.e., Dreyfus New and Dreyfus Amt go up and down completely randomly.
Pair Corralation between Dreyfus New and Dreyfus Amt
Assuming the 90 days horizon Dreyfus New is expected to generate 1.01 times less return on investment than Dreyfus Amt. But when comparing it to its historical volatility, Dreyfus New York is 1.03 times less risky than Dreyfus Amt. It trades about 0.07 of its potential returns per unit of risk. Dreyfus Amt Free Municipal is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,233 in Dreyfus Amt Free Municipal on September 23, 2024 and sell it today you would earn a total of 97.00 from holding Dreyfus Amt Free Municipal or generate 7.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dreyfus New York vs. Dreyfus Amt Free Municipal
Performance |
Timeline |
Dreyfus New York |
Dreyfus Amt Free |
Dreyfus New and Dreyfus Amt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dreyfus New and Dreyfus Amt
The main advantage of trading using opposite Dreyfus New and Dreyfus Amt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus New 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 New vs. Dreyfus High Yield | Dreyfus New vs. Dreyfusthe Boston Pany | Dreyfus New vs. Dreyfus International Bond | Dreyfus New vs. Dreyfus International Bond |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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