Correlation Between Fidelity Michigan and Fidelity Ohio
Can any of the company-specific risk be diversified away by investing in both Fidelity Michigan and Fidelity Ohio 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 Michigan and Fidelity Ohio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Michigan Municipal and Fidelity Ohio Municipal, you can compare the effects of market volatilities on Fidelity Michigan and Fidelity Ohio 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 Michigan with a short position of Fidelity Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Michigan and Fidelity Ohio.
Diversification Opportunities for Fidelity Michigan and Fidelity Ohio
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Fidelity and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Michigan Municipal and Fidelity Ohio Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Ohio Municipal and Fidelity Michigan 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 Michigan Municipal are associated (or correlated) with Fidelity Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Ohio Municipal has no effect on the direction of Fidelity Michigan i.e., Fidelity Michigan and Fidelity Ohio go up and down completely randomly.
Pair Corralation between Fidelity Michigan and Fidelity Ohio
Assuming the 90 days horizon Fidelity Michigan Municipal is expected to generate 1.04 times more return on investment than Fidelity Ohio. However, Fidelity Michigan is 1.04 times more volatile than Fidelity Ohio Municipal. It trades about 0.07 of its potential returns per unit of risk. Fidelity Ohio Municipal is currently generating about 0.07 per unit of risk. If you would invest 1,074 in Fidelity Michigan Municipal on August 26, 2024 and sell it today you would earn a total of 84.00 from holding Fidelity Michigan Municipal or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Michigan Municipal vs. Fidelity Ohio Municipal
Performance |
| Timeline |
| Fidelity Michigan |
| Fidelity Ohio Municipal |
Fidelity Michigan and Fidelity Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Michigan and Fidelity Ohio
The main advantage of trading using opposite Fidelity Michigan and Fidelity Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Michigan position performs unexpectedly, Fidelity Ohio 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 Fidelity Ohio will offset losses from the drop in Fidelity Ohio's long position.| Fidelity Michigan vs. Fidelity Freedom 2015 | Fidelity Michigan vs. Fidelity Puritan Fund | Fidelity Michigan vs. Fidelity Puritan Fund | Fidelity Michigan vs. Fidelity Pennsylvania Municipal |
| Fidelity Ohio vs. Fidelity Pennsylvania Municipal | Fidelity Ohio vs. Fidelity Michigan Municipal | Fidelity Ohio vs. Fidelity Arizona Municipal | Fidelity Ohio vs. Fidelity Necticut Municipal |
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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