Correlation Between Fidelity Series and Inflation Protected
Can any of the company-specific risk be diversified away by investing in both Fidelity Series and Inflation Protected 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 Inflation Protected 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 Inflation Protected Bond Fund, you can compare the effects of market volatilities on Fidelity Series and Inflation Protected 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 Inflation Protected. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and Inflation Protected.
Diversification Opportunities for Fidelity Series and Inflation Protected
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Inflation is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series International and Inflation Protected Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protected 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 Inflation Protected. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protected has no effect on the direction of Fidelity Series i.e., Fidelity Series and Inflation Protected go up and down completely randomly.
Pair Corralation between Fidelity Series and Inflation Protected
Assuming the 90 days horizon Fidelity Series International is expected to generate 1.97 times more return on investment than Inflation Protected. However, Fidelity Series is 1.97 times more volatile than Inflation Protected Bond Fund. It trades about 0.08 of its potential returns per unit of risk. Inflation Protected Bond Fund is currently generating about 0.07 per unit of risk. If you would invest 965.00 in Fidelity Series International on November 29, 2024 and sell it today you would earn a total of 348.00 from holding Fidelity Series International or generate 36.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Series International vs. Inflation Protected Bond Fund
Performance |
| Timeline |
| Fidelity Series Inte |
| Inflation Protected |
Fidelity Series and Inflation Protected Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Series and Inflation Protected
The main advantage of trading using opposite Fidelity Series and Inflation Protected positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Series position performs unexpectedly, Inflation Protected 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 Inflation Protected will offset losses from the drop in Inflation Protected's long position.| Fidelity Series vs. T Rowe Price | Fidelity Series vs. T Rowe Price | Fidelity Series vs. Boston Partners Small | Fidelity Series vs. Ab Small Cap |
| Inflation Protected vs. Shelton Emerging Markets | Inflation Protected vs. Franklin Federal Limited Term | Inflation Protected vs. Legg Mason Western | Inflation Protected vs. Rbc Emerging Markets |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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