Correlation Between Fidelity Series and Franklin California
Can any of the company-specific risk be diversified away by investing in both Fidelity Series and Franklin California 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 Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Series 1000 and Franklin California High, you can compare the effects of market volatilities on Fidelity Series and Franklin California 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 Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and Franklin California.
Diversification Opportunities for Fidelity Series and Franklin California
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidelity and Franklin is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series 1000 and Franklin California High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California High 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 1000 are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California High has no effect on the direction of Fidelity Series i.e., Fidelity Series and Franklin California go up and down completely randomly.
Pair Corralation between Fidelity Series and Franklin California
Assuming the 90 days horizon Fidelity Series 1000 is expected to generate 2.56 times more return on investment than Franklin California. However, Fidelity Series is 2.56 times more volatile than Franklin California High. It trades about 0.11 of its potential returns per unit of risk. Franklin California High is currently generating about 0.11 per unit of risk. If you would invest 1,376 in Fidelity Series 1000 on September 12, 2024 and sell it today you would earn a total of 374.00 from holding Fidelity Series 1000 or generate 27.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Series 1000 vs. Franklin California High
Performance |
| Timeline |
| Fidelity Series 1000 |
| Franklin California High |
Fidelity Series and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Series and Franklin California
The main advantage of trading using opposite Fidelity Series and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Series position performs unexpectedly, Franklin California 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 Franklin California will offset losses from the drop in Franklin California's long position.| Fidelity Series vs. Vanguard Value Index | Fidelity Series vs. Dodge Cox Stock | Fidelity Series vs. American Mutual Fund | Fidelity Series vs. American Funds American |
| Franklin California vs. Fidelity Series 1000 | Franklin California vs. Americafirst Large Cap | Franklin California vs. Dodge Cox Stock | Franklin California vs. Touchstone Large Cap |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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