Correlation Between Fidelity Series and California Bond
Can any of the company-specific risk be diversified away by investing in both Fidelity Series and California Bond 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 California Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Series International and California Bond Fund, you can compare the effects of market volatilities on Fidelity Series and California Bond 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 California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and California Bond.
Diversification Opportunities for Fidelity Series and California Bond
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and California is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series International and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Bond 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 International are associated (or correlated) with California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of Fidelity Series i.e., Fidelity Series and California Bond go up and down completely randomly.
Pair Corralation between Fidelity Series and California Bond
Assuming the 90 days horizon Fidelity Series is expected to generate 1.3 times less return on investment than California Bond. In addition to that, Fidelity Series is 4.15 times more volatile than California Bond Fund. It trades about 0.02 of its total potential returns per unit of risk. California Bond Fund is currently generating about 0.12 per unit of volatility. If you would invest 1,015 in California Bond Fund on September 2, 2024 and sell it today you would earn a total of 36.00 from holding California Bond Fund or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Series International vs. California Bond Fund
Performance |
| Timeline |
| Fidelity Series Inte |
| California Bond |
Fidelity Series and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Series and California Bond
The main advantage of trading using opposite Fidelity Series and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Series position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond's long position.| Fidelity Series vs. Ab Value Fund | Fidelity Series vs. Arrow Managed Futures | Fidelity Series vs. Bbh Partner Fund | Fidelity Series vs. Materials Portfolio Fidelity |
| California Bond vs. Tiaa Cref Lifestyle Moderate | California Bond vs. Fidelity Managed Retirement | California Bond vs. Transamerica Cleartrack Retirement | California Bond vs. Dimensional Retirement 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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