Correlation Between Fidelity Series and Franklin Government
Can any of the company-specific risk be diversified away by investing in both Fidelity Series and Franklin Government 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 Series and Franklin Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Series Government and Franklin Government Securities, you can compare the effects of market volatilities on Fidelity Series and Franklin Government 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 Series with a short position of Franklin Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and Franklin Government.
Diversification Opportunities for Fidelity Series and Franklin Government
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Franklin is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series Government and Franklin Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government and Fidelity Series 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 Series Government are associated (or correlated) with Franklin Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government has no effect on the direction of Fidelity Series i.e., Fidelity Series and Franklin Government go up and down completely randomly.
Pair Corralation between Fidelity Series and Franklin Government
Assuming the 90 days horizon Fidelity Series is expected to generate 1.12 times less return on investment than Franklin Government. In addition to that, Fidelity Series is 1.06 times more volatile than Franklin Government Securities. It trades about 0.07 of its total potential returns per unit of risk. Franklin Government Securities is currently generating about 0.08 per unit of volatility. If you would invest 494.00 in Franklin Government Securities on September 1, 2024 and sell it today you would earn a total of 17.00 from holding Franklin Government Securities or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Fidelity Series Government vs. Franklin Government Securities
Performance |
| Timeline |
| Fidelity Series Gove |
| Franklin Government |
Fidelity Series and Franklin Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Series and Franklin Government
The main advantage of trading using opposite Fidelity Series and Franklin Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Series position performs unexpectedly, Franklin Government 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 Franklin Government will offset losses from the drop in Franklin Government's long position.| Fidelity Series vs. Fidelity Freedom 2015 | Fidelity Series vs. Fidelity Puritan Fund | Fidelity Series vs. Fidelity Puritan Fund | Fidelity Series vs. Fidelity Pennsylvania Municipal |
| Franklin Government vs. Short Term Government Fund | Franklin Government vs. Dunham Porategovernment Bond | Franklin Government vs. Fidelity Series Government | Franklin Government vs. Lord Abbett 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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