Correlation Between Fidelity California and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Fidelity California and Templeton Global 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 Templeton Global 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 Templeton Global Smaller, you can compare the effects of market volatilities on Fidelity California and Templeton Global 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 Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity California and Templeton Global.
Diversification Opportunities for Fidelity California and Templeton Global
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Templeton is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity California Municipal and Templeton Global Smaller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Smaller 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 Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Smaller has no effect on the direction of Fidelity California i.e., Fidelity California and Templeton Global go up and down completely randomly.
Pair Corralation between Fidelity California and Templeton Global
Assuming the 90 days horizon Fidelity California is expected to generate 1.26 times less return on investment than Templeton Global. But when comparing it to its historical volatility, Fidelity California Municipal is 3.61 times less risky than Templeton Global. It trades about 0.07 of its potential returns per unit of risk. Templeton Global Smaller is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 835.00 in Templeton Global Smaller on November 8, 2024 and sell it today you would earn a total of 63.00 from holding Templeton Global Smaller or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Fidelity California Municipal vs. Templeton Global Smaller
Performance |
| Timeline |
| Fidelity California |
| Templeton Global Smaller |
Fidelity California and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity California and Templeton Global
The main advantage of trading using opposite Fidelity California and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity California position performs unexpectedly, Templeton Global 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 Templeton Global will offset losses from the drop in Templeton Global's long position.| Fidelity California vs. Jpmorgan High Yield | Fidelity California vs. Artisan High Income | Fidelity California vs. Payden High Income | Fidelity California vs. City National Rochdale |
| Templeton Global vs. Slow Capital Growth | Templeton Global vs. Eip Growth And | Templeton Global vs. Ab International Growth | Templeton Global vs. The Hartford Growth |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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