Correlation Between California High-yield and Fidelity China
Can any of the company-specific risk be diversified away by investing in both California High-yield and Fidelity China 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 California High-yield and Fidelity China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California High Yield Municipal and Fidelity China Region, you can compare the effects of market volatilities on California High-yield and Fidelity China 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 California High-yield with a short position of Fidelity China. Check out your portfolio center. Please also check ongoing floating volatility patterns of California High-yield and Fidelity China.
Diversification Opportunities for California High-yield and Fidelity China
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between California and Fidelity is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding California High Yield Municipa and Fidelity China Region in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity China Region and California High-yield 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 California High Yield Municipal are associated (or correlated) with Fidelity China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity China Region has no effect on the direction of California High-yield i.e., California High-yield and Fidelity China go up and down completely randomly.
Pair Corralation between California High-yield and Fidelity China
Assuming the 90 days horizon California High-yield is expected to generate 1.33 times less return on investment than Fidelity China. But when comparing it to its historical volatility, California High Yield Municipal is 4.56 times less risky than Fidelity China. It trades about 0.07 of its potential returns per unit of risk. Fidelity China Region is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,524 in Fidelity China Region on September 3, 2024 and sell it today you would earn a total of 291.00 from holding Fidelity China Region or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
California High Yield Municipa vs. Fidelity China Region
Performance |
| Timeline |
| California High Yield |
| Fidelity China Region |
California High-yield and Fidelity China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California High-yield and Fidelity China
The main advantage of trading using opposite California High-yield and Fidelity China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California High-yield position performs unexpectedly, Fidelity China 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 China will offset losses from the drop in Fidelity China's long position.| California High-yield vs. Volumetric Fund Volumetric | California High-yield vs. Abr 7525 Volatility | California High-yield vs. Qs Large Cap | California High-yield vs. Ab Value Fund |
| Fidelity China vs. T Rowe Price | Fidelity China vs. Matthews India Fund | Fidelity China vs. Aquagold International | Fidelity China vs. Morningstar Unconstrained Allocation |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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