Correlation Between Fidelity Ohio and Federated Ohio
Can any of the company-specific risk be diversified away by investing in both Fidelity Ohio and Federated 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 Ohio and Federated Ohio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Ohio Municipal and Federated Ohio Municipal, you can compare the effects of market volatilities on Fidelity Ohio and Federated 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 Ohio with a short position of Federated Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Ohio and Federated Ohio.
Diversification Opportunities for Fidelity Ohio and Federated Ohio
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Federated is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Ohio Municipal and Federated Ohio Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Ohio Municipal and Fidelity Ohio 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 Ohio Municipal are associated (or correlated) with Federated Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Ohio Municipal has no effect on the direction of Fidelity Ohio i.e., Fidelity Ohio and Federated Ohio go up and down completely randomly.
Pair Corralation between Fidelity Ohio and Federated Ohio
Assuming the 90 days horizon Fidelity Ohio Municipal is expected to generate 0.95 times more return on investment than Federated Ohio. However, Fidelity Ohio Municipal is 1.06 times less risky than Federated Ohio. It trades about 0.08 of its potential returns per unit of risk. Federated Ohio Municipal is currently generating about 0.07 per unit of risk. If you would invest 1,088 in Fidelity Ohio Municipal on September 12, 2024 and sell it today you would earn a total of 69.00 from holding Fidelity Ohio Municipal or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Ohio Municipal vs. Federated Ohio Municipal
Performance |
| Timeline |
| Fidelity Ohio Municipal |
| Federated Ohio Municipal |
Fidelity Ohio and Federated Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Ohio and Federated Ohio
The main advantage of trading using opposite Fidelity Ohio and Federated Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Ohio position performs unexpectedly, Federated 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 Federated Ohio will offset losses from the drop in Federated Ohio's long position.| Fidelity Ohio vs. Fidelity Pennsylvania Municipal | Fidelity Ohio vs. Fidelity Michigan Municipal | Fidelity Ohio vs. Fidelity Arizona Municipal | Fidelity Ohio vs. Fidelity Necticut Municipal |
| Federated Ohio vs. Hennessy Technology Fund | Federated Ohio vs. Blackrock Science Technology | Federated Ohio vs. Mfs Technology Fund | Federated Ohio vs. Allianzgi Technology Fund |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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