Correlation Between Fidelity Small and High-yield Municipal
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and High-yield 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 Small and High-yield Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Small Cap and High Yield Municipal Fund, you can compare the effects of market volatilities on Fidelity Small and High-yield 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 Small with a short position of High-yield Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and High-yield Municipal.
Diversification Opportunities for Fidelity Small and High-yield Municipal
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fidelity and High-yield is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal and Fidelity Small 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 Small Cap are associated (or correlated) with High-yield Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Fidelity Small i.e., Fidelity Small and High-yield Municipal go up and down completely randomly.
Pair Corralation between Fidelity Small and High-yield Municipal
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 3.78 times more return on investment than High-yield Municipal. However, Fidelity Small is 3.78 times more volatile than High Yield Municipal Fund. It trades about 0.2 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.08 per unit of risk. If you would invest 3,219 in Fidelity Small Cap on September 3, 2024 and sell it today you would earn a total of 476.00 from holding Fidelity Small Cap or generate 14.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. High Yield Municipal Fund
Performance |
| Timeline |
| Fidelity Small Cap |
| High Yield Municipal |
Fidelity Small and High-yield Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and High-yield Municipal
The main advantage of trading using opposite Fidelity Small and High-yield Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, High-yield 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 High-yield Municipal will offset losses from the drop in High-yield Municipal's long position.| Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Small Cap |
| High-yield Municipal vs. High Yield Fund Investor | High-yield Municipal vs. Intermediate Term Tax Free Bond | High-yield Municipal vs. California High Yield Municipal | High-yield Municipal vs. T Rowe Price |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |