Correlation Between Fidelity Covington and DBX ETF
Can any of the company-specific risk be diversified away by investing in both Fidelity Covington and DBX ETF 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 DBX ETF 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 DBX ETF Trust, you can compare the effects of market volatilities on Fidelity Covington and DBX ETF 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 DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Covington and DBX ETF.
Diversification Opportunities for Fidelity Covington and DBX ETF
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and DBX is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Covington Trust and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust 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 DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of Fidelity Covington i.e., Fidelity Covington and DBX ETF go up and down completely randomly.
Pair Corralation between Fidelity Covington and DBX ETF
Given the investment horizon of 90 days Fidelity Covington Trust is expected to generate 0.9 times more return on investment than DBX ETF. However, Fidelity Covington Trust is 1.11 times less risky than DBX ETF. It trades about 0.03 of its potential returns per unit of risk. DBX ETF Trust is currently generating about -0.01 per unit of risk. If you would invest 3,384 in Fidelity Covington Trust on November 18, 2024 and sell it today you would earn a total of 39.00 from holding Fidelity Covington Trust or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Covington Trust vs. DBX ETF Trust
Performance |
| Timeline |
| Fidelity Covington Trust |
| DBX ETF Trust |
Fidelity Covington and DBX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Covington and DBX ETF
The main advantage of trading using opposite Fidelity Covington and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Covington position performs unexpectedly, DBX ETF 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 DBX ETF will offset losses from the drop in DBX ETF's long position.| Fidelity Covington vs. JPMorgan Fundamental Data | Fidelity Covington vs. Vanguard Mid Cap Index | Fidelity Covington vs. SPDR SP 400 | Fidelity Covington vs. SPDR SP 400 |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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