Correlation Between Fidelity Managed and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Fidelity Managed and Invesco Municipal 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 Invesco Municipal 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 Invesco Municipal Income, you can compare the effects of market volatilities on Fidelity Managed and Invesco Municipal 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 Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Managed and Invesco Municipal.
Diversification Opportunities for Fidelity Managed and Invesco Municipal
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Invesco is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Managed Retirement and Invesco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Income 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 Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Income has no effect on the direction of Fidelity Managed i.e., Fidelity Managed and Invesco Municipal go up and down completely randomly.
Pair Corralation between Fidelity Managed and Invesco Municipal
Assuming the 90 days horizon Fidelity Managed Retirement is expected to under-perform the Invesco Municipal. In addition to that, Fidelity Managed is 1.25 times more volatile than Invesco Municipal Income. It trades about -0.16 of its total potential returns per unit of risk. Invesco Municipal Income is currently generating about -0.09 per unit of volatility. If you would invest 1,204 in Invesco Municipal Income on October 15, 2024 and sell it today you would lose (20.00) from holding Invesco Municipal Income or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Managed Retirement vs. Invesco Municipal Income
Performance |
| Timeline |
| Fidelity Managed Ret |
| Invesco Municipal Income |
Fidelity Managed and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Managed and Invesco Municipal
The main advantage of trading using opposite Fidelity Managed and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Managed position performs unexpectedly, Invesco Municipal 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 Invesco Municipal will offset losses from the drop in Invesco Municipal's long position.| Fidelity Managed vs. Legg Mason Global | Fidelity Managed vs. Qs Global Equity | Fidelity Managed vs. Ab Global Bond | Fidelity Managed vs. Federated Global Allocation |
| Invesco Municipal vs. T Rowe Price | Invesco Municipal vs. Aqr Diversified Arbitrage | Invesco Municipal vs. Tiaa Cref Small Cap Equity | Invesco Municipal vs. Wells Fargo 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |