Correlation Between IShares Core and Fidelity Covington
Can any of the company-specific risk be diversified away by investing in both IShares Core and Fidelity Covington 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 IShares Core and Fidelity Covington into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and Fidelity Covington Trust, you can compare the effects of market volatilities on IShares Core and Fidelity Covington 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 IShares Core with a short position of Fidelity Covington. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Fidelity Covington.
Diversification Opportunities for IShares Core and Fidelity Covington
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Fidelity Covington Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Covington Trust and IShares Core 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 iShares Core SP are associated (or correlated) with Fidelity Covington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Covington Trust has no effect on the direction of IShares Core i.e., IShares Core and Fidelity Covington go up and down completely randomly.
Pair Corralation between IShares Core and Fidelity Covington
Given the investment horizon of 90 days IShares Core is expected to generate 1.33 times less return on investment than Fidelity Covington. But when comparing it to its historical volatility, iShares Core SP is 1.25 times less risky than Fidelity Covington. It trades about 0.1 of its potential returns per unit of risk. Fidelity Covington Trust is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,327 in Fidelity Covington Trust on August 26, 2024 and sell it today you would earn a total of 1,176 from holding Fidelity Covington Trust or generate 88.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. Fidelity Covington Trust
Performance |
| Timeline |
| iShares Core SP |
| Fidelity Covington Trust |
IShares Core and Fidelity Covington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Fidelity Covington
The main advantage of trading using opposite IShares Core and Fidelity Covington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Fidelity Covington 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 Covington will offset losses from the drop in Fidelity Covington's long position.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares Russell Top | IShares Core vs. iShares Core MSCI |
| Fidelity Covington vs. Invesco Dynamic Large | Fidelity Covington vs. Perella Weinberg Partners | Fidelity Covington vs. HUMANA INC | Fidelity Covington vs. Aquagold International |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |