Correlation Between Federated Ohio and Fidelity New
Can any of the company-specific risk be diversified away by investing in both Federated Ohio and Fidelity New 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 Federated Ohio and Fidelity New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Ohio Municipal and Fidelity New Markets, you can compare the effects of market volatilities on Federated Ohio and Fidelity New 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 Federated Ohio with a short position of Fidelity New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ohio and Fidelity New.
Diversification Opportunities for Federated Ohio and Fidelity New
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Fidelity is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Fidelity New Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity New Markets and Federated Ohio 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 Federated Ohio Municipal are associated (or correlated) with Fidelity New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity New Markets has no effect on the direction of Federated Ohio i.e., Federated Ohio and Fidelity New go up and down completely randomly.
Pair Corralation between Federated Ohio and Fidelity New
Assuming the 90 days horizon Federated Ohio is expected to generate 179.67 times less return on investment than Fidelity New. But when comparing it to its historical volatility, Federated Ohio Municipal is 1.21 times less risky than Fidelity New. It trades about 0.0 of its potential returns per unit of risk. Fidelity New Markets is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,273 in Fidelity New Markets on November 5, 2024 and sell it today you would earn a total of 13.00 from holding Fidelity New Markets or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ohio Municipal vs. Fidelity New Markets
Performance |
| Timeline |
| Federated Ohio Municipal |
| Fidelity New Markets |
Federated Ohio and Fidelity New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ohio and Fidelity New
The main advantage of trading using opposite Federated Ohio and Fidelity New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ohio position performs unexpectedly, Fidelity New 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 New will offset losses from the drop in Fidelity New's long position.| Federated Ohio vs. Balanced Strategy Fund | Federated Ohio vs. Ashmore Emerging Markets | Federated Ohio vs. Angel Oak Multi Strategy | Federated Ohio vs. Vy Jpmorgan Emerging |
| Fidelity New vs. Elfun Government Money | Fidelity New vs. Schwab Government Money | Fidelity New vs. Inverse Government Long | Fidelity New vs. Intermediate Government Bond |
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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