Correlation Between Fidelity Flex and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Fidelity Flex and Invesco Municipal 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 Flex and Invesco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Flex Servative and Invesco Municipal Income, you can compare the effects of market volatilities on Fidelity Flex and Invesco Municipal 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 Flex with a short position of Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Flex and Invesco Municipal.
Diversification Opportunities for Fidelity Flex and Invesco Municipal
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and Invesco is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Flex Servative and Invesco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Income and Fidelity Flex 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 Flex Servative are associated (or correlated) with Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Income has no effect on the direction of Fidelity Flex i.e., Fidelity Flex and Invesco Municipal go up and down completely randomly.
Pair Corralation between Fidelity Flex and Invesco Municipal
Assuming the 90 days horizon Fidelity Flex Servative is expected to generate 0.2 times more return on investment than Invesco Municipal. However, Fidelity Flex Servative is 4.92 times less risky than Invesco Municipal. It trades about -0.08 of its potential returns per unit of risk. Invesco Municipal Income is currently generating about -0.36 per unit of risk. If you would invest 1,004 in Fidelity Flex Servative on October 11, 2024 and sell it today you would lose (1.00) from holding Fidelity Flex Servative or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Flex Servative vs. Invesco Municipal Income
Performance |
| Timeline |
| Fidelity Flex Servative |
| Invesco Municipal Income |
Fidelity Flex and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Flex and Invesco Municipal
The main advantage of trading using opposite Fidelity Flex and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Flex position performs unexpectedly, Invesco Municipal 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 Invesco Municipal will offset losses from the drop in Invesco Municipal's long position.| Fidelity Flex vs. Artisan Developing World | Fidelity Flex vs. Alphacentric Symmetry Strategy | Fidelity Flex vs. Angel Oak Multi Strategy | Fidelity Flex vs. Ashmore Emerging Markets |
| Invesco Municipal vs. Ultra Short Fixed Income | Invesco Municipal vs. Transam Short Term Bond | Invesco Municipal vs. Alpine Ultra Short | Invesco Municipal vs. Fidelity Flex Servative |
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.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |