Correlation Between Dreyfus Municipal and American High
Can any of the company-specific risk be diversified away by investing in both Dreyfus Municipal and American High 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 Municipal and American High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Municipal Bond and American High Income Municipal, you can compare the effects of market volatilities on Dreyfus Municipal and American High 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 Municipal with a short position of American High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Municipal and American High.
Diversification Opportunities for Dreyfus Municipal and American High
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Dreyfus and American is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Municipal Bond and American High Income Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Income and Dreyfus Municipal 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 Municipal Bond are associated (or correlated) with American High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American High Income has no effect on the direction of Dreyfus Municipal i.e., Dreyfus Municipal and American High go up and down completely randomly.
Pair Corralation between Dreyfus Municipal and American High
Assuming the 90 days horizon Dreyfus Municipal Bond is expected to generate 1.74 times more return on investment than American High. However, Dreyfus Municipal is 1.74 times more volatile than American High Income Municipal. It trades about 0.35 of its potential returns per unit of risk. American High Income Municipal is currently generating about 0.38 per unit of risk. If you would invest 1,103 in Dreyfus Municipal Bond on September 3, 2025 and sell it today you would earn a total of 75.00 from holding Dreyfus Municipal Bond or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Municipal Bond vs. American High Income Municipal
Performance |
| Timeline |
| Dreyfus Municipal Bond |
| American High Income |
Dreyfus Municipal and American High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Municipal and American High
The main advantage of trading using opposite Dreyfus Municipal and American High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Municipal position performs unexpectedly, American High 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 American High will offset losses from the drop in American High's long position.| Dreyfus Municipal vs. John Hancock High | Dreyfus Municipal vs. Ab High Income | Dreyfus Municipal vs. Msift High Yield | Dreyfus Municipal vs. Ab High Income |
| American High vs. Fidelity California Municipal | American High vs. Dreyfus Municipal Bond | American High vs. Delaware National Municipal | American High vs. Alliancebernstein National Municipalome |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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