Correlation Between Fidelity New and Fidelity Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Fidelity New and Fidelity Pennsylvania 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 New and Fidelity Pennsylvania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity New York and Fidelity Pennsylvania Municipal, you can compare the effects of market volatilities on Fidelity New and Fidelity Pennsylvania 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 New with a short position of Fidelity Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Fidelity Pennsylvania.
Diversification Opportunities for Fidelity New and Fidelity Pennsylvania
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New York and Fidelity Pennsylvania Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Pennsylvania and Fidelity New 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 New York are associated (or correlated) with Fidelity Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Pennsylvania has no effect on the direction of Fidelity New i.e., Fidelity New and Fidelity Pennsylvania go up and down completely randomly.
Pair Corralation between Fidelity New and Fidelity Pennsylvania
Assuming the 90 days horizon Fidelity New York is expected to generate 1.29 times more return on investment than Fidelity Pennsylvania. However, Fidelity New is 1.29 times more volatile than Fidelity Pennsylvania Municipal. It trades about 0.16 of its potential returns per unit of risk. Fidelity Pennsylvania Municipal is currently generating about 0.19 per unit of risk. If you would invest 1,233 in Fidelity New York on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Fidelity New York or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity New York vs. Fidelity Pennsylvania Municipa
Performance |
| Timeline |
| Fidelity New York |
| Fidelity Pennsylvania |
Fidelity New and Fidelity Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity New and Fidelity Pennsylvania
The main advantage of trading using opposite Fidelity New and Fidelity Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New position performs unexpectedly, Fidelity Pennsylvania 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 Pennsylvania will offset losses from the drop in Fidelity Pennsylvania's long position.| Fidelity New vs. Fidelity Pennsylvania Municipal | Fidelity New vs. Fidelity New Jersey | Fidelity New vs. Fidelity Necticut Municipal | Fidelity New vs. Fidelity Ohio 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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