Correlation Between Fidelity Canada and Multisector Bond
Can any of the company-specific risk be diversified away by investing in both Fidelity Canada and Multisector 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 Canada and Multisector Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Canada Fund and Multisector Bond Sma, you can compare the effects of market volatilities on Fidelity Canada and Multisector 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 Canada with a short position of Multisector Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Canada and Multisector Bond.
Diversification Opportunities for Fidelity Canada and Multisector Bond
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and Multisector is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Canada Fund and Multisector Bond Sma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multisector Bond Sma and Fidelity Canada 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 Canada Fund are associated (or correlated) with Multisector Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multisector Bond Sma has no effect on the direction of Fidelity Canada i.e., Fidelity Canada and Multisector Bond go up and down completely randomly.
Pair Corralation between Fidelity Canada and Multisector Bond
Assuming the 90 days horizon Fidelity Canada Fund is expected to generate 2.31 times more return on investment than Multisector Bond. However, Fidelity Canada is 2.31 times more volatile than Multisector Bond Sma. It trades about 0.38 of its potential returns per unit of risk. Multisector Bond Sma is currently generating about 0.42 per unit of risk. If you would invest 7,097 in Fidelity Canada Fund on September 2, 2024 and sell it today you would earn a total of 366.00 from holding Fidelity Canada Fund or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Canada Fund vs. Multisector Bond Sma
Performance |
| Timeline |
| Fidelity Canada |
| Multisector Bond Sma |
Fidelity Canada and Multisector Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Canada and Multisector Bond
The main advantage of trading using opposite Fidelity Canada and Multisector Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Canada position performs unexpectedly, Multisector 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 Multisector Bond will offset losses from the drop in Multisector Bond's long position.| Fidelity Canada vs. Multisector Bond Sma | Fidelity Canada vs. Ab Bond Inflation | Fidelity Canada vs. Blrc Sgy Mnp | Fidelity Canada vs. Oklahoma Municipal Fund |
| Multisector Bond vs. T Rowe Price | Multisector Bond vs. Nuveen Arizona Municipal | Multisector Bond vs. Ishares Municipal Bond | Multisector Bond vs. Franklin High Yield |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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