Correlation Between SPDR DoubleLine and Fidelity Total
Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine 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 SPDR DoubleLine and Fidelity Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR DoubleLine Total and Fidelity Total Bond, you can compare the effects of market volatilities on SPDR DoubleLine 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 SPDR DoubleLine with a short position of Fidelity Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and Fidelity Total.
Diversification Opportunities for SPDR DoubleLine and Fidelity Total
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and Fidelity is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Total 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 SPDR DoubleLine 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 SPDR DoubleLine Total 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 SPDR DoubleLine i.e., SPDR DoubleLine and Fidelity Total go up and down completely randomly.
Pair Corralation between SPDR DoubleLine and Fidelity Total
Given the investment horizon of 90 days SPDR DoubleLine is expected to generate 1.25 times less return on investment than Fidelity Total. But when comparing it to its historical volatility, SPDR DoubleLine Total is 1.01 times less risky than Fidelity Total. It trades about 0.07 of its potential returns per unit of risk. Fidelity Total Bond is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,553 in Fidelity Total Bond on August 27, 2024 and sell it today you would earn a total of 30.00 from holding Fidelity Total Bond or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR DoubleLine Total vs. Fidelity Total Bond
Performance |
| Timeline |
| SPDR DoubleLine Total |
| Fidelity Total Bond |
SPDR DoubleLine and Fidelity Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR DoubleLine and Fidelity Total
The main advantage of trading using opposite SPDR DoubleLine and Fidelity Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR DoubleLine 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.| SPDR DoubleLine vs. PIMCO Active Bond | SPDR DoubleLine vs. SPDR Blackstone Senior | SPDR DoubleLine vs. SPDR Barclays Intermediate | SPDR DoubleLine vs. SPDR Bloomberg Investment |
| Fidelity Total vs. First Trust Low | Fidelity Total vs. First Trust Enhanced | Fidelity Total vs. First Trust Tactical | Fidelity Total vs. First Trust Managed |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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