Correlation Between Fidelity Corporate and Fidelity Focused
Can any of the company-specific risk be diversified away by investing in both Fidelity Corporate and Fidelity Focused 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 Corporate and Fidelity Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Porate Bond and Fidelity Focused High, you can compare the effects of market volatilities on Fidelity Corporate and Fidelity Focused 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 Corporate with a short position of Fidelity Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Corporate and Fidelity Focused.
Diversification Opportunities for Fidelity Corporate and Fidelity Focused
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and Fidelity is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Porate Bond and Fidelity Focused High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Focused High and Fidelity Corporate 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 Porate Bond are associated (or correlated) with Fidelity Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Focused High has no effect on the direction of Fidelity Corporate i.e., Fidelity Corporate and Fidelity Focused go up and down completely randomly.
Pair Corralation between Fidelity Corporate and Fidelity Focused
Assuming the 90 days horizon Fidelity Corporate is expected to generate 1.33 times less return on investment than Fidelity Focused. In addition to that, Fidelity Corporate is 1.6 times more volatile than Fidelity Focused High. It trades about 0.05 of its total potential returns per unit of risk. Fidelity Focused High is currently generating about 0.1 per unit of volatility. If you would invest 712.00 in Fidelity Focused High on September 3, 2024 and sell it today you would earn a total of 107.00 from holding Fidelity Focused High or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Porate Bond vs. Fidelity Focused High
Performance |
| Timeline |
| Fidelity Porate Bond |
| Fidelity Focused High |
Fidelity Corporate and Fidelity Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Corporate and Fidelity Focused
The main advantage of trading using opposite Fidelity Corporate and Fidelity Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Corporate position performs unexpectedly, Fidelity Focused 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 Focused will offset losses from the drop in Fidelity Focused's long position.| Fidelity Corporate vs. Fidelity Total Bond | Fidelity Corporate vs. Fidelity Advisor Limited | Fidelity Corporate vs. Fidelity Focused High | Fidelity Corporate vs. Fidelity Investment Grade |
| Fidelity Focused vs. Vanguard High Yield Corporate | Fidelity Focused vs. Vanguard High Yield Porate | Fidelity Focused vs. Blackrock Hi Yld | Fidelity Focused vs. Blackrock 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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