Correlation Between Fidelity Intermediate and Westcore Municipal
Can any of the company-specific risk be diversified away by investing in both Fidelity Intermediate and Westcore 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 Intermediate and Westcore Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Intermediate Municipal and Westcore Municipal Opportunities, you can compare the effects of market volatilities on Fidelity Intermediate and Westcore 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 Intermediate with a short position of Westcore Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Intermediate and Westcore Municipal.
Diversification Opportunities for Fidelity Intermediate and Westcore Municipal
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Westcore is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Intermediate Municipa and Westcore Municipal Opportuniti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westcore Municipal and Fidelity Intermediate 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 Intermediate Municipal are associated (or correlated) with Westcore Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westcore Municipal has no effect on the direction of Fidelity Intermediate i.e., Fidelity Intermediate and Westcore Municipal go up and down completely randomly.
Pair Corralation between Fidelity Intermediate and Westcore Municipal
Assuming the 90 days horizon Fidelity Intermediate Municipal is expected to generate 1.12 times more return on investment than Westcore Municipal. However, Fidelity Intermediate is 1.12 times more volatile than Westcore Municipal Opportunities. It trades about 0.08 of its potential returns per unit of risk. Westcore Municipal Opportunities is currently generating about 0.0 per unit of risk. If you would invest 1,007 in Fidelity Intermediate Municipal on August 26, 2024 and sell it today you would earn a total of 4.00 from holding Fidelity Intermediate Municipal or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Intermediate Municipa vs. Westcore Municipal Opportuniti
Performance |
| Timeline |
| Fidelity Intermediate |
| Westcore Municipal |
Fidelity Intermediate and Westcore Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Intermediate and Westcore Municipal
The main advantage of trading using opposite Fidelity Intermediate and Westcore Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Intermediate position performs unexpectedly, Westcore 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 Westcore Municipal will offset losses from the drop in Westcore Municipal's long position.| Fidelity Intermediate vs. Fidelity Limited Term | Fidelity Intermediate vs. Fidelity Municipal Income | Fidelity Intermediate vs. Fidelity Tax Free Bond | Fidelity Intermediate vs. Fidelity Advisor Floating |
| Westcore Municipal vs. Segall Bryant Hamill | Westcore Municipal vs. Segall Bryant Hamill | Westcore Municipal vs. Segall Bryant Hamill | Westcore Municipal vs. Segall Bryant Hamill |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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