Correlation Between Barclays ETN and Fidelity Investment
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and Fidelity Investment 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 Barclays ETN and Fidelity Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays ETN Select and Fidelity Investment Grade, you can compare the effects of market volatilities on Barclays ETN and Fidelity Investment 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 Barclays ETN with a short position of Fidelity Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and Fidelity Investment.
Diversification Opportunities for Barclays ETN and Fidelity Investment
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barclays and Fidelity is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and Fidelity Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Investment Grade and Barclays ETN 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 Barclays ETN Select are associated (or correlated) with Fidelity Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Investment Grade has no effect on the direction of Barclays ETN i.e., Barclays ETN and Fidelity Investment go up and down completely randomly.
Pair Corralation between Barclays ETN and Fidelity Investment
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 2.34 times more return on investment than Fidelity Investment. However, Barclays ETN is 2.34 times more volatile than Fidelity Investment Grade. It trades about 0.51 of its potential returns per unit of risk. Fidelity Investment Grade is currently generating about 0.08 per unit of risk. If you would invest 2,654 in Barclays ETN Select on August 29, 2024 and sell it today you would earn a total of 330.00 from holding Barclays ETN Select or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Select vs. Fidelity Investment Grade
Performance |
| Timeline |
| Barclays ETN Select |
| Fidelity Investment Grade |
Barclays ETN and Fidelity Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and Fidelity Investment
The main advantage of trading using opposite Barclays ETN and Fidelity Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, Fidelity Investment 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 Fidelity Investment will offset losses from the drop in Fidelity Investment's long position.| Barclays ETN vs. Alerian Energy Infrastructure | Barclays ETN vs. UBS AG London | Barclays ETN vs. First Trust North | Barclays ETN vs. Tortoise North American |
| Fidelity Investment vs. Fidelity Investment Grade | Fidelity Investment vs. Fidelity Preferred Securities | Fidelity Investment vs. Fidelity Limited Term | Fidelity Investment vs. Fidelity Corporate 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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