Correlation Between Fidelity Managed and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both Fidelity Managed and Metropolitan West 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 Managed and Metropolitan West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Managed Retirement and Metropolitan West Total, you can compare the effects of market volatilities on Fidelity Managed and Metropolitan West 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 Managed with a short position of Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Managed and Metropolitan West.
Diversification Opportunities for Fidelity Managed and Metropolitan West
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Metropolitan is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Managed Retirement and Metropolitan West Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West Total and Fidelity Managed 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 Managed Retirement are associated (or correlated) with Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West Total has no effect on the direction of Fidelity Managed i.e., Fidelity Managed and Metropolitan West go up and down completely randomly.
Pair Corralation between Fidelity Managed and Metropolitan West
Assuming the 90 days horizon Fidelity Managed Retirement is expected to generate 0.87 times more return on investment than Metropolitan West. However, Fidelity Managed Retirement is 1.15 times less risky than Metropolitan West. It trades about 0.1 of its potential returns per unit of risk. Metropolitan West Total is currently generating about 0.09 per unit of risk. If you would invest 5,423 in Fidelity Managed Retirement on August 31, 2024 and sell it today you would earn a total of 43.00 from holding Fidelity Managed Retirement or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Managed Retirement vs. Metropolitan West Total
Performance |
| Timeline |
| Fidelity Managed Ret |
| Metropolitan West Total |
Fidelity Managed and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Managed and Metropolitan West
The main advantage of trading using opposite Fidelity Managed and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Managed position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West's long position.| Fidelity Managed vs. Federated Ohio Municipal | Fidelity Managed vs. Nuveen Minnesota Municipal | Fidelity Managed vs. Pace Municipal Fixed | Fidelity Managed vs. Alliancebernstein National Municipal |
| Metropolitan West vs. Fidelity Managed Retirement | Metropolitan West vs. American Funds Retirement | Metropolitan West vs. Franklin Lifesmart Retirement | Metropolitan West vs. Jp Morgan Smartretirement |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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