Correlation Between DBX ETF and Fidelity Covington
Can any of the company-specific risk be diversified away by investing in both DBX ETF 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 DBX ETF and Fidelity Covington into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBX ETF Trust and Fidelity Covington Trust, you can compare the effects of market volatilities on DBX ETF 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 DBX ETF with a short position of Fidelity Covington. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBX ETF and Fidelity Covington.
Diversification Opportunities for DBX ETF and Fidelity Covington
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DBX and Fidelity is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding DBX ETF Trust 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 DBX ETF 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 DBX ETF Trust 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 DBX ETF i.e., DBX ETF and Fidelity Covington go up and down completely randomly.
Pair Corralation between DBX ETF and Fidelity Covington
Given the investment horizon of 90 days DBX ETF is expected to generate 1.35 times less return on investment than Fidelity Covington. In addition to that, DBX ETF is 1.27 times more volatile than Fidelity Covington Trust. It trades about 0.18 of its total potential returns per unit of risk. Fidelity Covington Trust is currently generating about 0.3 per unit of volatility. If you would invest 3,249 in Fidelity Covington Trust on August 23, 2024 and sell it today you would earn a total of 208.00 from holding Fidelity Covington Trust or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DBX ETF Trust vs. Fidelity Covington Trust
Performance |
| Timeline |
| DBX ETF Trust |
| Fidelity Covington Trust |
DBX ETF and Fidelity Covington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBX ETF and Fidelity Covington
The main advantage of trading using opposite DBX ETF and Fidelity Covington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBX ETF 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.The idea behind DBX ETF Trust and Fidelity Covington Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Fidelity Covington vs. JPMorgan Fundamental Data | Fidelity Covington vs. Vanguard Mid Cap Index | Fidelity Covington vs. SPDR SP 400 | Fidelity Covington vs. SPDR SP 400 |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |