Correlation Between Fidelity California and Ftfa Franklin
Can any of the company-specific risk be diversified away by investing in both Fidelity California and Ftfa Franklin 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 California and Ftfa Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity California Municipal and Ftfa Franklin Templeton Growth, you can compare the effects of market volatilities on Fidelity California and Ftfa Franklin 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 California with a short position of Ftfa Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity California and Ftfa Franklin.
Diversification Opportunities for Fidelity California and Ftfa Franklin
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Ftfa is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity California Municipal and Ftfa Franklin Templeton Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ftfa Franklin Templeton and Fidelity California 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 California Municipal are associated (or correlated) with Ftfa Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ftfa Franklin Templeton has no effect on the direction of Fidelity California i.e., Fidelity California and Ftfa Franklin go up and down completely randomly.
Pair Corralation between Fidelity California and Ftfa Franklin
Assuming the 90 days horizon Fidelity California is expected to generate 6.61 times less return on investment than Ftfa Franklin. But when comparing it to its historical volatility, Fidelity California Municipal is 2.69 times less risky than Ftfa Franklin. It trades about 0.03 of its potential returns per unit of risk. Ftfa Franklin Templeton Growth is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,626 in Ftfa Franklin Templeton Growth on October 18, 2024 and sell it today you would earn a total of 430.00 from holding Ftfa Franklin Templeton Growth or generate 26.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity California Municipal vs. Ftfa Franklin Templeton Growth
Performance |
| Timeline |
| Fidelity California |
| Ftfa Franklin Templeton |
Fidelity California and Ftfa Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity California and Ftfa Franklin
The main advantage of trading using opposite Fidelity California and Ftfa Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity California position performs unexpectedly, Ftfa Franklin 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 Ftfa Franklin will offset losses from the drop in Ftfa Franklin's long position.| Fidelity California vs. Lord Abbett Government | Fidelity California vs. Dws Government Money | Fidelity California vs. Dreyfus Government Cash | Fidelity California vs. Intermediate Government Bond |
| Ftfa Franklin vs. Dws Government Money | Ftfa Franklin vs. Blackrock Pa Muni | Ftfa Franklin vs. Fidelity California Municipal | Ftfa Franklin vs. Franklin Adjustable Government |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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