Correlation Between Fidelity Municipal and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both Fidelity Municipal and Fidelity Series 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 Municipal and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Municipal Income and Fidelity Series Government, you can compare the effects of market volatilities on Fidelity Municipal and Fidelity Series 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 Municipal with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Municipal and Fidelity Series.
Diversification Opportunities for Fidelity Municipal and Fidelity Series
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FIDELITY and Fidelity is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Municipal Income and Fidelity Series Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Gove and Fidelity Municipal 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 Municipal Income are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Gove has no effect on the direction of Fidelity Municipal i.e., Fidelity Municipal and Fidelity Series go up and down completely randomly.
Pair Corralation between Fidelity Municipal and Fidelity Series
Assuming the 90 days horizon Fidelity Municipal Income is expected to generate 0.63 times more return on investment than Fidelity Series. However, Fidelity Municipal Income is 1.59 times less risky than Fidelity Series. It trades about 0.07 of its potential returns per unit of risk. Fidelity Series Government is currently generating about 0.02 per unit of risk. If you would invest 1,133 in Fidelity Municipal Income on August 24, 2024 and sell it today you would earn a total of 96.00 from holding Fidelity Municipal Income or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Municipal Income vs. Fidelity Series Government
Performance |
| Timeline |
| Fidelity Municipal Income |
| Fidelity Series Gove |
Fidelity Municipal and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Municipal and Fidelity Series
The main advantage of trading using opposite Fidelity Municipal and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Municipal position performs unexpectedly, Fidelity Series 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 Series will offset losses from the drop in Fidelity Series' long position.| Fidelity Municipal vs. The Hartford Small | Fidelity Municipal vs. Small Pany Growth | Fidelity Municipal vs. Vanguard Small Cap Index | Fidelity Municipal vs. Qs Small Capitalization |
| Fidelity Series vs. Pace Municipal Fixed | Fidelity Series vs. Vanguard Short Term Government | Fidelity Series vs. Transamerica Intermediate Muni | Fidelity Series vs. Bbh Intermediate 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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