Correlation Between Fidelity California and Multi-index 2050
Can any of the company-specific risk be diversified away by investing in both Fidelity California and Multi-index 2050 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 Multi-index 2050 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 Multi Index 2050 Lifetime, you can compare the effects of market volatilities on Fidelity California and Multi-index 2050 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 Multi-index 2050. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity California and Multi-index 2050.
Diversification Opportunities for Fidelity California and Multi-index 2050
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Multi-index is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity California Municipal and Multi Index 2050 Lifetime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Index 2050 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 Multi-index 2050. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Index 2050 has no effect on the direction of Fidelity California i.e., Fidelity California and Multi-index 2050 go up and down completely randomly.
Pair Corralation between Fidelity California and Multi-index 2050
Assuming the 90 days horizon Fidelity California is expected to generate 7.74 times less return on investment than Multi-index 2050. But when comparing it to its historical volatility, Fidelity California Municipal is 3.17 times less risky than Multi-index 2050. It trades about 0.04 of its potential returns per unit of risk. Multi Index 2050 Lifetime is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,499 in Multi Index 2050 Lifetime on October 25, 2024 and sell it today you would earn a total of 19.00 from holding Multi Index 2050 Lifetime or generate 1.27% 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. Multi Index 2050 Lifetime
Performance |
| Timeline |
| Fidelity California |
| Multi Index 2050 |
Fidelity California and Multi-index 2050 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity California and Multi-index 2050
The main advantage of trading using opposite Fidelity California and Multi-index 2050 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity California position performs unexpectedly, Multi-index 2050 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 Multi-index 2050 will offset losses from the drop in Multi-index 2050's long position.| Fidelity California vs. Inflation Protected Bond Fund | Fidelity California vs. Guggenheim Managed Futures | Fidelity California vs. Short Duration Inflation | Fidelity California vs. Atac Inflation Rotation |
| Multi-index 2050 vs. Siit Ultra Short | Multi-index 2050 vs. Prudential Short Duration | Multi-index 2050 vs. Angel Oak Ultrashort | Multi-index 2050 vs. Transam Short Term 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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