Correlation Between Fidelity Arizona and Franklin Ohio
Can any of the company-specific risk be diversified away by investing in both Fidelity Arizona and Franklin 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 Arizona and Franklin Ohio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Arizona Municipal and Franklin Ohio Tax Free, you can compare the effects of market volatilities on Fidelity Arizona and Franklin 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 Arizona with a short position of Franklin Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Arizona and Franklin Ohio.
Diversification Opportunities for Fidelity Arizona and Franklin Ohio
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Franklin is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Arizona Municipal and Franklin Ohio Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Ohio Tax and Fidelity Arizona 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 Arizona Municipal are associated (or correlated) with Franklin Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Ohio Tax has no effect on the direction of Fidelity Arizona i.e., Fidelity Arizona and Franklin Ohio go up and down completely randomly.
Pair Corralation between Fidelity Arizona and Franklin Ohio
Assuming the 90 days horizon Fidelity Arizona Municipal is expected to generate 0.88 times more return on investment than Franklin Ohio. However, Fidelity Arizona Municipal is 1.14 times less risky than Franklin Ohio. It trades about 0.09 of its potential returns per unit of risk. Franklin Ohio Tax Free is currently generating about 0.06 per unit of risk. If you would invest 1,066 in Fidelity Arizona Municipal on September 12, 2024 and sell it today you would earn a total of 99.00 from holding Fidelity Arizona Municipal or generate 9.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fidelity Arizona Municipal vs. Franklin Ohio Tax Free
Performance |
| Timeline |
| Fidelity Arizona Mun |
| Franklin Ohio Tax |
Fidelity Arizona and Franklin Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Arizona and Franklin Ohio
The main advantage of trading using opposite Fidelity Arizona and Franklin Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Arizona position performs unexpectedly, Franklin 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 Franklin Ohio will offset losses from the drop in Franklin Ohio's long position.| Fidelity Arizona vs. Guggenheim Risk Managed | Fidelity Arizona vs. Commonwealth Real Estate | Fidelity Arizona vs. Jhancock Real Estate | Fidelity Arizona vs. Franklin Real Estate |
| Franklin Ohio vs. Fidelity Pennsylvania Municipal | Franklin Ohio vs. Fidelity Michigan Municipal | Franklin Ohio vs. Fidelity Arizona Municipal | Franklin 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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