Correlation Between Fidelity Covington and FSMO
Can any of the company-specific risk be diversified away by investing in both Fidelity Covington and FSMO 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 Covington and FSMO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Covington Trust and FSMO, you can compare the effects of market volatilities on Fidelity Covington and FSMO 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 Covington with a short position of FSMO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Covington and FSMO.
Diversification Opportunities for Fidelity Covington and FSMO
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and FSMO is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Covington Trust and FSMO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSMO and Fidelity Covington 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 Covington Trust are associated (or correlated) with FSMO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSMO has no effect on the direction of Fidelity Covington i.e., Fidelity Covington and FSMO go up and down completely randomly.
Pair Corralation between Fidelity Covington and FSMO
If you would invest 2,205 in Fidelity Covington Trust on August 26, 2024 and sell it today you would earn a total of 951.00 from holding Fidelity Covington Trust or generate 43.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.3% |
| Values | Daily Returns |
Fidelity Covington Trust vs. FSMO
Performance |
| Timeline |
| Fidelity Covington Trust |
| FSMO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fidelity Covington and FSMO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Covington and FSMO
The main advantage of trading using opposite Fidelity Covington and FSMO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Covington position performs unexpectedly, FSMO 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 FSMO will offset losses from the drop in FSMO's long position.| Fidelity Covington vs. Invesco Dynamic Large | Fidelity Covington vs. Perella Weinberg Partners | Fidelity Covington vs. HUMANA INC | Fidelity Covington vs. Aquagold International |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |