Correlation Between Fidelity Covington and Fidelity Summer
Can any of the company-specific risk be diversified away by investing in both Fidelity Covington and Fidelity Summer 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 Fidelity Summer 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 Fidelity Summer Street, you can compare the effects of market volatilities on Fidelity Covington and Fidelity Summer 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 Fidelity Summer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Covington and Fidelity Summer.
Diversification Opportunities for Fidelity Covington and Fidelity Summer
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Fidelity is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Covington Trust and Fidelity Summer Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Summer Street 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 Fidelity Summer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Summer Street has no effect on the direction of Fidelity Covington i.e., Fidelity Covington and Fidelity Summer go up and down completely randomly.
Pair Corralation between Fidelity Covington and Fidelity Summer
Given the investment horizon of 90 days Fidelity Covington Trust is expected to generate 2.27 times more return on investment than Fidelity Summer. However, Fidelity Covington is 2.27 times more volatile than Fidelity Summer Street. It trades about 0.16 of its potential returns per unit of risk. Fidelity Summer Street is currently generating about 0.05 per unit of risk. If you would invest 1,372 in Fidelity Covington Trust on September 13, 2024 and sell it today you would earn a total of 52.00 from holding Fidelity Covington Trust or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Covington Trust vs. Fidelity Summer Street
Performance |
| Timeline |
| Fidelity Covington Trust |
| Fidelity Summer Street |
Fidelity Covington and Fidelity Summer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Covington and Fidelity Summer
The main advantage of trading using opposite Fidelity Covington and Fidelity Summer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Covington position performs unexpectedly, Fidelity Summer 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 Summer will offset losses from the drop in Fidelity Summer's long position.| Fidelity Covington vs. Fidelity Covington Trust | Fidelity Covington vs. Fidelity Covington Trust | Fidelity Covington vs. Fidelity Covington Trust | Fidelity Covington vs. Fidelity Crypto Industry |
| Fidelity Summer vs. Fidelity Freedom 2015 | Fidelity Summer vs. Fidelity Puritan Fund | Fidelity Summer vs. Fidelity Puritan Fund | Fidelity Summer vs. Fidelity Pennsylvania 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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