Correlation Between Fidelity Managed and Target Retirement
Can any of the company-specific risk be diversified away by investing in both Fidelity Managed and Target Retirement 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 Target Retirement 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 Target Retirement 2040, you can compare the effects of market volatilities on Fidelity Managed and Target Retirement 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 Target Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Managed and Target Retirement.
Diversification Opportunities for Fidelity Managed and Target Retirement
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Target is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Managed Retirement and Target Retirement 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Retirement 2040 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 Target Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Retirement 2040 has no effect on the direction of Fidelity Managed i.e., Fidelity Managed and Target Retirement go up and down completely randomly.
Pair Corralation between Fidelity Managed and Target Retirement
Assuming the 90 days horizon Fidelity Managed is expected to generate 1.38 times less return on investment than Target Retirement. But when comparing it to its historical volatility, Fidelity Managed Retirement is 1.69 times less risky than Target Retirement. It trades about 0.09 of its potential returns per unit of risk. Target Retirement 2040 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,193 in Target Retirement 2040 on November 3, 2024 and sell it today you would earn a total of 137.00 from holding Target Retirement 2040 or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Managed Retirement vs. Target Retirement 2040
Performance |
| Timeline |
| Fidelity Managed Ret |
| Target Retirement 2040 |
Fidelity Managed and Target Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Managed and Target Retirement
The main advantage of trading using opposite Fidelity Managed and Target Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Managed position performs unexpectedly, Target Retirement 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 Target Retirement will offset losses from the drop in Target Retirement's long position.| Fidelity Managed vs. World Energy Fund | Fidelity Managed vs. Energy Services Fund | Fidelity Managed vs. Fidelity Advisor Energy | Fidelity Managed vs. Salient Mlp Energy |
| Target Retirement vs. Federated High Yield | Target Retirement vs. Msift High Yield | Target Retirement vs. Buffalo High Yield | Target Retirement vs. Prudential High Yield |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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