Correlation Between Fidelity Maryland and Fidelity Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Fidelity Maryland and Fidelity Pennsylvania 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 Maryland and Fidelity Pennsylvania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Maryland Municipal and Fidelity Pennsylvania Municipal, you can compare the effects of market volatilities on Fidelity Maryland and Fidelity Pennsylvania 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 Maryland with a short position of Fidelity Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Maryland and Fidelity Pennsylvania.
Diversification Opportunities for Fidelity Maryland and Fidelity Pennsylvania
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Fidelity and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Maryland Municipal and Fidelity Pennsylvania Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Pennsylvania and Fidelity Maryland 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 Maryland Municipal are associated (or correlated) with Fidelity Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Pennsylvania has no effect on the direction of Fidelity Maryland i.e., Fidelity Maryland and Fidelity Pennsylvania go up and down completely randomly.
Pair Corralation between Fidelity Maryland and Fidelity Pennsylvania
Assuming the 90 days horizon Fidelity Maryland Municipal is expected to under-perform the Fidelity Pennsylvania. In addition to that, Fidelity Maryland is 1.13 times more volatile than Fidelity Pennsylvania Municipal. It trades about -0.13 of its total potential returns per unit of risk. Fidelity Pennsylvania Municipal is currently generating about -0.15 per unit of volatility. If you would invest 1,039 in Fidelity Pennsylvania Municipal on January 22, 2025 and sell it today you would lose (24.00) from holding Fidelity Pennsylvania Municipal or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Maryland Municipal vs. Fidelity Pennsylvania Municipa
Performance |
| Timeline |
| Fidelity Maryland |
| Fidelity Pennsylvania |
Fidelity Maryland and Fidelity Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Maryland and Fidelity Pennsylvania
The main advantage of trading using opposite Fidelity Maryland and Fidelity Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Maryland position performs unexpectedly, Fidelity Pennsylvania 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 Pennsylvania will offset losses from the drop in Fidelity Pennsylvania's long position.| Fidelity Maryland vs. Fidelity Pennsylvania Municipal | Fidelity Maryland vs. Fidelity Arizona Municipal | Fidelity Maryland vs. Fidelity Necticut Municipal | Fidelity Maryland vs. Fidelity Ohio Municipal |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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