Correlation Between Fidelity Capital and Government Securities
Can any of the company-specific risk be diversified away by investing in both Fidelity Capital and Government Securities 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 Government Securities 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 Government Securities Fund, you can compare the effects of market volatilities on Fidelity Capital and Government Securities 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 Government Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and Government Securities.
Diversification Opportunities for Fidelity Capital and Government Securities
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Government is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and Government Securities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Government Securities 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 Government Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Government Securities has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and Government Securities go up and down completely randomly.
Pair Corralation between Fidelity Capital and Government Securities
Assuming the 90 days horizon Fidelity Capital Income is expected to generate 0.79 times more return on investment than Government Securities. However, Fidelity Capital Income is 1.27 times less risky than Government Securities. It trades about 0.34 of its potential returns per unit of risk. Government Securities Fund is currently generating about -0.11 per unit of risk. If you would invest 988.00 in Fidelity Capital Income on September 12, 2024 and sell it today you would earn a total of 50.00 from holding Fidelity Capital Income or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Fidelity Capital Income vs. Government Securities Fund
Performance |
| Timeline |
| Fidelity Capital Income |
| Government Securities |
Fidelity Capital and Government Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Capital and Government Securities
The main advantage of trading using opposite Fidelity Capital and Government Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital position performs unexpectedly, Government Securities 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 Government Securities will offset losses from the drop in Government Securities' long position.| Fidelity Capital vs. Fidelity High Income | Fidelity Capital vs. Fidelity New Markets | Fidelity Capital vs. Fidelity Total Bond | Fidelity Capital vs. Fidelity Balanced Fund |
| Government Securities vs. Siit High Yield | Government Securities vs. Blackrock High Yield | Government Securities vs. Prudential High Yield | Government Securities vs. Jpmorgan 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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