Correlation Between Fidelity Series and Western Asset
Can any of the company-specific risk be diversified away by investing in both Fidelity Series and Western Asset 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 Western Asset 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 Western Asset Inflation, you can compare the effects of market volatilities on Fidelity Series and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and Western Asset.
Diversification Opportunities for Fidelity Series and Western Asset
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Western is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series Government and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Inflation has no effect on the direction of Fidelity Series i.e., Fidelity Series and Western Asset go up and down completely randomly.
Pair Corralation between Fidelity Series and Western Asset
Assuming the 90 days horizon Fidelity Series Government is expected to generate 0.94 times more return on investment than Western Asset. However, Fidelity Series Government is 1.06 times less risky than Western Asset. It trades about 0.03 of its potential returns per unit of risk. Western Asset Inflation is currently generating about 0.02 per unit of risk. If you would invest 873.00 in Fidelity Series Government on September 2, 2024 and sell it today you would earn a total of 45.00 from holding Fidelity Series Government or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Series Government vs. Western Asset Inflation
Performance |
| Timeline |
| Fidelity Series Gove |
| Western Asset Inflation |
Fidelity Series and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Series and Western Asset
The main advantage of trading using opposite Fidelity Series and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Series position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Fidelity Series vs. Calamos Dynamic Convertible | Fidelity Series vs. Bbh Intermediate Municipal | Fidelity Series vs. Multisector Bond Sma | Fidelity Series vs. Ab Bond Inflation |
| Western Asset vs. Needham Aggressive Growth | Western Asset vs. Legg Mason Partners | Western Asset vs. Lgm Risk Managed | Western Asset vs. Franklin 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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