Correlation Between IShares Yield and Fidelity Total
Can any of the company-specific risk be diversified away by investing in both IShares Yield and Fidelity Total 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 IShares Yield and Fidelity Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Yield Optimized and Fidelity Total Bond, you can compare the effects of market volatilities on IShares Yield and Fidelity Total 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 IShares Yield with a short position of Fidelity Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Yield and Fidelity Total.
Diversification Opportunities for IShares Yield and Fidelity Total
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Fidelity is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding iShares Yield Optimized and Fidelity Total Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Total Bond and IShares 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 iShares Yield Optimized are associated (or correlated) with Fidelity Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Total Bond has no effect on the direction of IShares Yield i.e., IShares Yield and Fidelity Total go up and down completely randomly.
Pair Corralation between IShares Yield and Fidelity Total
Given the investment horizon of 90 days iShares Yield Optimized is expected to generate 0.78 times more return on investment than Fidelity Total. However, iShares Yield Optimized is 1.28 times less risky than Fidelity Total. It trades about 0.08 of its potential returns per unit of risk. Fidelity Total Bond is currently generating about 0.04 per unit of risk. If you would invest 2,003 in iShares Yield Optimized on August 31, 2024 and sell it today you would earn a total of 254.00 from holding iShares Yield Optimized or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Yield Optimized vs. Fidelity Total Bond
Performance |
| Timeline |
| iShares Yield Optimized |
| Fidelity Total Bond |
IShares Yield and Fidelity Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Yield and Fidelity Total
The main advantage of trading using opposite IShares Yield and Fidelity Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Yield position performs unexpectedly, Fidelity Total 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 Total will offset losses from the drop in Fidelity Total's long position.| IShares Yield vs. iShares Interest Rate | IShares Yield vs. iShares Agency Bond | IShares Yield vs. iShares JP Morgan | IShares Yield vs. iShares Interest Rate |
| Fidelity Total vs. Fidelity Corporate Bond | Fidelity Total vs. Fidelity Limited Term | Fidelity Total vs. Fidelity High Yield | Fidelity Total vs. Fidelity High Dividend |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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