Correlation Between Fidelity Capital and Dfa Municipal
Can any of the company-specific risk be diversified away by investing in both Fidelity Capital and Dfa 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 Fidelity Capital and Dfa Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Capital Income and Dfa Municipal Real, you can compare the effects of market volatilities on Fidelity Capital and Dfa 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 Fidelity Capital with a short position of Dfa Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and Dfa Municipal.
Diversification Opportunities for Fidelity Capital and Dfa Municipal
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Dfa is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and Dfa Municipal Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Municipal Real and Fidelity Capital 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 Fidelity Capital Income are associated (or correlated) with Dfa Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Municipal Real has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and Dfa Municipal go up and down completely randomly.
Pair Corralation between Fidelity Capital and Dfa Municipal
Assuming the 90 days horizon Fidelity Capital Income is expected to generate 3.89 times more return on investment than Dfa Municipal. However, Fidelity Capital is 3.89 times more volatile than Dfa Municipal Real. It trades about 0.36 of its potential returns per unit of risk. Dfa Municipal Real is currently generating about 0.13 per unit of risk. If you would invest 1,016 in Fidelity Capital Income on September 3, 2024 and sell it today you would earn a total of 21.00 from holding Fidelity Capital Income or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Capital Income vs. Dfa Municipal Real
Performance |
| Timeline |
| Fidelity Capital Income |
| Dfa Municipal Real |
Fidelity Capital and Dfa Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Capital and Dfa Municipal
The main advantage of trading using opposite Fidelity Capital and Dfa Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital position performs unexpectedly, Dfa 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 Dfa Municipal will offset losses from the drop in Dfa Municipal's long position.| Fidelity Capital vs. Vanguard High Yield Corporate | Fidelity Capital vs. Vanguard High Yield Porate | Fidelity Capital vs. Blackrock Hi Yld | Fidelity Capital vs. Blackrock High Yield |
| Dfa Municipal vs. Fidelity Capital Income | Dfa Municipal vs. Alpine High Yield | Dfa Municipal vs. Siit High Yield | Dfa Municipal vs. Dunham High Yield |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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