Correlation Between Fidelity Sustainable and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Fidelity Sustainable and SPDR SP 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 Sustainable and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Sustainable USD and SPDR SP Materials, you can compare the effects of market volatilities on Fidelity Sustainable and SPDR SP 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 Sustainable with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sustainable and SPDR SP.
Diversification Opportunities for Fidelity Sustainable and SPDR SP
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and SPDR is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sustainable USD and SPDR SP Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Materials and Fidelity Sustainable 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 Sustainable USD are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Materials has no effect on the direction of Fidelity Sustainable i.e., Fidelity Sustainable and SPDR SP go up and down completely randomly.
Pair Corralation between Fidelity Sustainable and SPDR SP
Assuming the 90 days trading horizon Fidelity Sustainable is expected to generate 1.27 times less return on investment than SPDR SP. But when comparing it to its historical volatility, Fidelity Sustainable USD is 2.11 times less risky than SPDR SP. It trades about 0.07 of its potential returns per unit of risk. SPDR SP Materials is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,105 in SPDR SP Materials on September 12, 2024 and sell it today you would earn a total of 326.00 from holding SPDR SP Materials or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Sustainable USD vs. SPDR SP Materials
Performance |
| Timeline |
| Fidelity Sustainable USD |
| SPDR SP Materials |
Fidelity Sustainable and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Sustainable and SPDR SP
The main advantage of trading using opposite Fidelity Sustainable and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Sustainable position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Fidelity Sustainable vs. GraniteShares 3x Short | Fidelity Sustainable vs. WisdomTree Natural Gas | Fidelity Sustainable vs. Leverage Shares 3x | Fidelity Sustainable vs. WisdomTree Natural Gas |
| SPDR SP vs. SPDR Dow Jones | SPDR SP vs. SPDR SP Dividend | SPDR SP vs. SPDR Barclays Euro | SPDR SP vs. SPDR SP Consumer |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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