Correlation Between Fidelity Total and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Fidelity Total and IShares Trust 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 Total and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Total Bond and iShares Trust , you can compare the effects of market volatilities on Fidelity Total and IShares Trust 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 Total with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Total and IShares Trust.
Diversification Opportunities for Fidelity Total and IShares Trust
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Fidelity and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Total Bond and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and Fidelity Total 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 Total Bond are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Fidelity Total i.e., Fidelity Total and IShares Trust go up and down completely randomly.
Pair Corralation between Fidelity Total and IShares Trust
Given the investment horizon of 90 days Fidelity Total Bond is expected to generate 0.78 times more return on investment than IShares Trust. However, Fidelity Total Bond is 1.29 times less risky than IShares Trust. It trades about -0.1 of its potential returns per unit of risk. iShares Trust is currently generating about -0.09 per unit of risk. If you would invest 4,569 in Fidelity Total Bond on August 23, 2024 and sell it today you would lose (30.00) from holding Fidelity Total Bond or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Total Bond vs. iShares Trust
Performance |
| Timeline |
| Fidelity Total Bond |
| iShares Trust |
Fidelity Total and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Total and IShares Trust
The main advantage of trading using opposite Fidelity Total and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Total position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust's long position.| Fidelity Total vs. Fidelity Corporate Bond | Fidelity Total vs. Fidelity Limited Term | Fidelity Total vs. Fidelity High Yield | Fidelity Total vs. Fidelity High Dividend |
| IShares Trust vs. iShares ESG Aggregate | IShares Trust vs. iShares ESG Advanced | IShares Trust vs. iShares ESG Advanced | IShares Trust vs. iShares ESG USD |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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