Correlation Between Dreyfus New and New York

Can any of the company-specific risk be diversified away by investing in both Dreyfus New and New York 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 New York 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 New York Tax Free, you can compare the effects of market volatilities on Dreyfus New and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus New and New York.

Diversification Opportunities for Dreyfus New and New York

-0.64

Correlation Coefficient

Dreyfus New  New York

Excellent diversification

The 3 months correlation between Dreyfus and New is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus New York and New York Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Tax 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Tax has no effect on the direction of Dreyfus New i.e., Dreyfus New and New York go up and down completely randomly.

Pair Corralation between Dreyfus New and New York

If you would invest  1,066  in New York Tax Free on September 27, 2024 and sell it today you would earn a total of  7.00  from holding New York Tax Free or generate 0.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.8%
Values	Daily Returns

Dreyfus New York  vs.  New York Tax Free

Dreyfus New York

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfus New York has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dreyfus New is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

New York Tax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New York Tax Free has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, New York is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dreyfus New and New York

The main advantage of trading using opposite Dreyfus New and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus New position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.

The idea behind Dreyfus New York and New York Tax Free pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.