Correlation Between Fidelity Flex and Municipal Bond
Can any of the company-specific risk be diversified away by investing in both Fidelity Flex and Municipal Bond 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 Flex and Municipal Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Flex 500 and Municipal Bond Fund, you can compare the effects of market volatilities on Fidelity Flex and Municipal Bond 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 Flex with a short position of Municipal Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Flex and Municipal Bond.
Diversification Opportunities for Fidelity Flex and Municipal Bond
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidelity and Municipal is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Flex 500 and Municipal Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Municipal Bond and Fidelity Flex 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 Flex 500 are associated (or correlated) with Municipal Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Municipal Bond has no effect on the direction of Fidelity Flex i.e., Fidelity Flex and Municipal Bond go up and down completely randomly.
Pair Corralation between Fidelity Flex and Municipal Bond
Assuming the 90 days horizon Fidelity Flex 500 is expected to generate 2.83 times more return on investment than Municipal Bond. However, Fidelity Flex is 2.83 times more volatile than Municipal Bond Fund. It trades about 0.19 of its potential returns per unit of risk. Municipal Bond Fund is currently generating about 0.05 per unit of risk. If you would invest 2,386 in Fidelity Flex 500 on September 12, 2024 and sell it today you would earn a total of 196.00 from holding Fidelity Flex 500 or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Flex 500 vs. Municipal Bond Fund
Performance |
| Timeline |
| Fidelity Flex 500 |
| Municipal Bond |
Fidelity Flex and Municipal Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Flex and Municipal Bond
The main advantage of trading using opposite Fidelity Flex and Municipal Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Flex position performs unexpectedly, Municipal Bond 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 Municipal Bond will offset losses from the drop in Municipal Bond's long position.| Fidelity Flex vs. Vanguard Total Stock | Fidelity Flex vs. Vanguard 500 Index | Fidelity Flex vs. Vanguard Total Stock | Fidelity Flex vs. Vanguard Total Stock |
| Municipal Bond vs. Ppm High Yield | Municipal Bond vs. Ab High Income | Municipal Bond vs. Fa 529 Aggressive | Municipal Bond vs. Artisan High Income |
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.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |