Correlation Between Fidelity Capital and Short-term Municipal
Can any of the company-specific risk be diversified away by investing in both Fidelity Capital and Short-term 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 Short-term 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 Short Term Municipal Bond, you can compare the effects of market volatilities on Fidelity Capital and Short-term 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 Short-term Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and Short-term Municipal.
Diversification Opportunities for Fidelity Capital and Short-term Municipal
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Short-term is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and Short Term Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Municipal 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 Short-term Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Municipal has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and Short-term Municipal go up and down completely randomly.
Pair Corralation between Fidelity Capital and Short-term Municipal
Assuming the 90 days horizon Fidelity Capital Income is expected to generate 3.74 times more return on investment than Short-term Municipal. However, Fidelity Capital is 3.74 times more volatile than Short Term Municipal Bond. It trades about 0.36 of its potential returns per unit of risk. Short Term Municipal Bond is currently generating about 0.18 per unit of risk. If you would invest 1,016 in Fidelity Capital Income on October 25, 2024 and sell it today you would earn a total of 23.00 from holding Fidelity Capital Income or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Fidelity Capital Income vs. Short Term Municipal Bond
Performance |
| Timeline |
| Fidelity Capital Income |
| Short Term Municipal |
Fidelity Capital and Short-term Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Capital and Short-term Municipal
The main advantage of trading using opposite Fidelity Capital and Short-term Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital position performs unexpectedly, Short-term 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 Short-term Municipal will offset losses from the drop in Short-term Municipal's 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 |
| Short-term Municipal vs. T Rowe Price | Short-term Municipal vs. Nuveen Missouri Municipal | Short-term Municipal vs. Dws Government Money | Short-term Municipal vs. Morningstar Defensive 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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