Correlation Between VanEck Preferred and Fidelity Preferred
Can any of the company-specific risk be diversified away by investing in both VanEck Preferred and Fidelity Preferred 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 VanEck Preferred and Fidelity Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Preferred Securities and Fidelity Preferred Securities, you can compare the effects of market volatilities on VanEck Preferred and Fidelity Preferred 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 VanEck Preferred with a short position of Fidelity Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Preferred and Fidelity Preferred.
Diversification Opportunities for VanEck Preferred and Fidelity Preferred
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and Fidelity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Preferred Securities and Fidelity Preferred Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Preferred and VanEck Preferred 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 VanEck Preferred Securities are associated (or correlated) with Fidelity Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Preferred has no effect on the direction of VanEck Preferred i.e., VanEck Preferred and Fidelity Preferred go up and down completely randomly.
Pair Corralation between VanEck Preferred and Fidelity Preferred
Given the investment horizon of 90 days VanEck Preferred Securities is expected to generate 1.92 times more return on investment than Fidelity Preferred. However, VanEck Preferred is 1.92 times more volatile than Fidelity Preferred Securities. It trades about 0.01 of its potential returns per unit of risk. Fidelity Preferred Securities is currently generating about -0.05 per unit of risk. If you would invest 1,799 in VanEck Preferred Securities on August 30, 2024 and sell it today you would earn a total of 2.00 from holding VanEck Preferred Securities or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Preferred Securities vs. Fidelity Preferred Securities
Performance |
| Timeline |
| VanEck Preferred Sec |
| Fidelity Preferred |
VanEck Preferred and Fidelity Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Preferred and Fidelity Preferred
The main advantage of trading using opposite VanEck Preferred and Fidelity Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Preferred position performs unexpectedly, Fidelity Preferred 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 Preferred will offset losses from the drop in Fidelity Preferred's long position.| VanEck Preferred vs. Global X SuperIncome | VanEck Preferred vs. SPDR ICE Preferred | VanEck Preferred vs. Invesco Preferred ETF | VanEck Preferred vs. Invesco Variable Rate |
| Fidelity Preferred vs. Fidelity Investment Grade | Fidelity Preferred vs. Fidelity Investment Grade | Fidelity Preferred vs. Fidelity High Yield | Fidelity Preferred vs. Fidelity Corporate 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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