Correlation Between Fidelity New and Dreyfus Bond
Can any of the company-specific risk be diversified away by investing in both Fidelity New and Dreyfus 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 New and Dreyfus Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity New Markets and Dreyfus Bond Market, you can compare the effects of market volatilities on Fidelity New and Dreyfus 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 New with a short position of Dreyfus Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Dreyfus Bond.
Diversification Opportunities for Fidelity New and Dreyfus Bond
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Dreyfus is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Markets and Dreyfus Bond Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Bond Market and Fidelity New 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 New Markets are associated (or correlated) with Dreyfus Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Bond Market has no effect on the direction of Fidelity New i.e., Fidelity New and Dreyfus Bond go up and down completely randomly.
Pair Corralation between Fidelity New and Dreyfus Bond
Assuming the 90 days horizon Fidelity New Markets is expected to generate 1.15 times more return on investment than Dreyfus Bond. However, Fidelity New is 1.15 times more volatile than Dreyfus Bond Market. It trades about -0.35 of its potential returns per unit of risk. Dreyfus Bond Market is currently generating about -0.49 per unit of risk. If you would invest 1,297 in Fidelity New Markets on October 11, 2024 and sell it today you would lose (27.00) from holding Fidelity New Markets or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity New Markets vs. Dreyfus Bond Market
Performance |
| Timeline |
| Fidelity New Markets |
| Dreyfus Bond Market |
Fidelity New and Dreyfus Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity New and Dreyfus Bond
The main advantage of trading using opposite Fidelity New and Dreyfus Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New position performs unexpectedly, Dreyfus 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 Dreyfus Bond will offset losses from the drop in Dreyfus Bond's long position.| Fidelity New vs. Asg Managed Futures | Fidelity New vs. Ab Bond Inflation | Fidelity New vs. Aqr Managed Futures | Fidelity New vs. Tiaa Cref Inflation Linked Bond |
| Dreyfus Bond vs. Pimco Diversified Income | Dreyfus Bond vs. Fulcrum Diversified Absolute | Dreyfus Bond vs. Aqr Diversified Arbitrage | Dreyfus Bond vs. Manning Napier Diversified |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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