Correlation Between Fidelity Covington and Fidelity Crypto
Can any of the company-specific risk be diversified away by investing in both Fidelity Covington and Fidelity Crypto 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 Covington and Fidelity Crypto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Covington Trust and Fidelity Crypto Industry, you can compare the effects of market volatilities on Fidelity Covington and Fidelity Crypto 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 Covington with a short position of Fidelity Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Covington and Fidelity Crypto.
Diversification Opportunities for Fidelity Covington and Fidelity Crypto
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Covington Trust and Fidelity Crypto Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Crypto Industry and Fidelity Covington 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 Covington Trust are associated (or correlated) with Fidelity Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Crypto Industry has no effect on the direction of Fidelity Covington i.e., Fidelity Covington and Fidelity Crypto go up and down completely randomly.
Pair Corralation between Fidelity Covington and Fidelity Crypto
Given the investment horizon of 90 days Fidelity Covington is expected to generate 1.92 times less return on investment than Fidelity Crypto. But when comparing it to its historical volatility, Fidelity Covington Trust is 3.95 times less risky than Fidelity Crypto. It trades about 0.35 of its potential returns per unit of risk. Fidelity Crypto Industry is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,244 in Fidelity Crypto Industry on August 30, 2024 and sell it today you would earn a total of 689.00 from holding Fidelity Crypto Industry or generate 21.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Covington Trust vs. Fidelity Crypto Industry
Performance |
| Timeline |
| Fidelity Covington Trust |
| Fidelity Crypto Industry |
Fidelity Covington and Fidelity Crypto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Covington and Fidelity Crypto
The main advantage of trading using opposite Fidelity Covington and Fidelity Crypto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Covington position performs unexpectedly, Fidelity Crypto 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 Crypto will offset losses from the drop in Fidelity Crypto's long position.| Fidelity Covington vs. Fidelity Covington Trust | Fidelity Covington vs. Fidelity Covington Trust | Fidelity Covington vs. Fidelity Covington Trust | Fidelity Covington vs. Fidelity Metaverse ETF |
| Fidelity Crypto vs. Grayscale Bitcoin Trust | Fidelity Crypto vs. ProShares Bitcoin Strategy | Fidelity Crypto vs. Amplify Transformational Data | Fidelity Crypto vs. Bitwise Crypto Industry |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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