Correlation Between Columbia Integrated and Dreyfus Municipal

Can any of the company-specific risk be diversified away by investing in both Columbia Integrated 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 Columbia Integrated and Dreyfus Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Columbia Integrated Large and Dreyfus Municipal Bond, you can compare the effects of market volatilities on Columbia Integrated 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 Columbia Integrated with a short position of Dreyfus Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Integrated and Dreyfus Municipal.

Diversification Opportunities for Columbia Integrated and Dreyfus Municipal

-0.04

Correlation Coefficient

Columbia Integrated  Dreyfus Municipal

Good diversification

The 3 months correlation between Columbia and Dreyfus is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Integrated Large 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 Columbia Integrated 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 Columbia Integrated Large 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 Columbia Integrated i.e., Columbia Integrated and Dreyfus Municipal go up and down completely randomly.

Pair Corralation between Columbia Integrated and Dreyfus Municipal

Assuming the 90 days horizon Columbia Integrated Large is expected to under-perform the Dreyfus Municipal. In addition to that, Columbia Integrated is 3.41 times more volatile than Dreyfus Municipal Bond. It trades about -0.12 of its total potential returns per unit of risk. Dreyfus Municipal Bond is currently generating about -0.05 per unit of volatility. If you would invest  1,192  in Dreyfus Municipal Bond on December 22, 2024 and sell it today you would lose (14.00) from holding Dreyfus Municipal Bond or give up 1.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Columbia Integrated Large  vs.  Dreyfus Municipal Bond

Columbia Integrated Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Columbia Integrated Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Dreyfus Municipal Bond

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Columbia Integrated and Dreyfus Municipal

The main advantage of trading using opposite Columbia Integrated and Dreyfus Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Integrated 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.

The idea behind Columbia Integrated Large and Dreyfus Municipal Bond 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..