Correlation Between California Bond and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both California Bond and Fidelity Series 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 California Bond and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Fidelity Series International, you can compare the effects of market volatilities on California Bond and Fidelity Series 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 California Bond with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Fidelity Series.
Diversification Opportunities for California Bond and Fidelity Series
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between California and Fidelity is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Fidelity Series International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Inte and California 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 California Bond Fund are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Inte has no effect on the direction of California Bond i.e., California Bond and Fidelity Series go up and down completely randomly.
Pair Corralation between California Bond and Fidelity Series
Assuming the 90 days horizon California Bond Fund is expected to generate 0.24 times more return on investment than Fidelity Series. However, California Bond Fund is 4.15 times less risky than Fidelity Series. It trades about 0.11 of its potential returns per unit of risk. Fidelity Series International is currently generating about 0.0 per unit of risk. If you would invest 1,019 in California Bond Fund on September 3, 2024 and sell it today you would earn a total of 33.00 from holding California Bond Fund or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. Fidelity Series International
Performance |
| Timeline |
| California Bond |
| Fidelity Series Inte |
California Bond and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Fidelity Series
The main advantage of trading using opposite California Bond and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond position performs unexpectedly, Fidelity Series 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 Series will offset losses from the drop in Fidelity Series' long position.| California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free | California Bond vs. Vanguard California Long Term |
| Fidelity Series vs. Oakmark International Fund | Fidelity Series vs. Dodge International Stock | Fidelity Series vs. Oakmark International Fund | Fidelity Series vs. Oakmark International Fund |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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