Correlation Between Thompson Bond and Fidelity Total
Can any of the company-specific risk be diversified away by investing in both Thompson Bond and Fidelity Total 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 Thompson Bond and Fidelity Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thompson Bond Fund and Fidelity Total Bond, you can compare the effects of market volatilities on Thompson Bond and Fidelity Total 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 Thompson Bond with a short position of Fidelity Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thompson Bond and Fidelity Total.
Diversification Opportunities for Thompson Bond and Fidelity Total
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thompson and Fidelity is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Thompson Bond Fund and Fidelity Total Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Total Bond and Thompson Bond 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 Thompson Bond Fund are associated (or correlated) with Fidelity Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Total Bond has no effect on the direction of Thompson Bond i.e., Thompson Bond and Fidelity Total go up and down completely randomly.
Pair Corralation between Thompson Bond and Fidelity Total
Assuming the 90 days horizon Thompson Bond Fund is expected to generate 0.32 times more return on investment than Fidelity Total. However, Thompson Bond Fund is 3.11 times less risky than Fidelity Total. It trades about 0.36 of its potential returns per unit of risk. Fidelity Total Bond is currently generating about 0.1 per unit of risk. If you would invest 1,002 in Thompson Bond Fund on September 1, 2024 and sell it today you would earn a total of 48.00 from holding Thompson Bond Fund or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thompson Bond Fund vs. Fidelity Total Bond
Performance |
| Timeline |
| Thompson Bond |
| Fidelity Total Bond |
Thompson Bond and Fidelity Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thompson Bond and Fidelity Total
The main advantage of trading using opposite Thompson Bond and Fidelity Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thompson Bond position performs unexpectedly, Fidelity Total 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 Total will offset losses from the drop in Fidelity Total's long position.| Thompson Bond vs. Tcw Total Return | Thompson Bond vs. Amg Yacktman Focused | Thompson Bond vs. Fidelity Advisor Floating | Thompson Bond vs. Doubleline Total Return |
| Fidelity Total vs. Fidelity Capital Income | Fidelity Total vs. Fidelity Short Term Bond | Fidelity Total vs. Fidelity Investment Grade | Fidelity Total vs. Fidelity High Income |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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