Correlation Between California Bond and Fidelity Managed
Can any of the company-specific risk be diversified away by investing in both California Bond and Fidelity Managed 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 Managed 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 Managed Retirement, you can compare the effects of market volatilities on California Bond and Fidelity Managed 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 Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Fidelity Managed.
Diversification Opportunities for California Bond and Fidelity Managed
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between California and Fidelity is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Fidelity Managed Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Managed Ret 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 Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Managed Ret has no effect on the direction of California Bond i.e., California Bond and Fidelity Managed go up and down completely randomly.
Pair Corralation between California Bond and Fidelity Managed
Assuming the 90 days horizon California Bond is expected to generate 1.75 times less return on investment than Fidelity Managed. But when comparing it to its historical volatility, California Bond Fund is 1.16 times less risky than Fidelity Managed. It trades about 0.06 of its potential returns per unit of risk. Fidelity Managed Retirement is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,938 in Fidelity Managed Retirement on November 27, 2024 and sell it today you would earn a total of 690.00 from holding Fidelity Managed Retirement or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. Fidelity Managed Retirement
Performance |
| Timeline |
| California Bond |
| Fidelity Managed Ret |
California Bond and Fidelity Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Fidelity Managed
The main advantage of trading using opposite California Bond and Fidelity Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond position performs unexpectedly, Fidelity Managed 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 Managed will offset losses from the drop in Fidelity Managed's long position.| California Bond vs. Federated Government Income | California Bond vs. Us Government Securities | California Bond vs. Dunham Porategovernment Bond | California Bond vs. John Hancock Government |
| Fidelity Managed vs. Putnam Vertible Securities | Fidelity Managed vs. Fidelity Vertible Securities | Fidelity Managed vs. Invesco Vertible Securities | Fidelity Managed vs. Lord Abbett Vertible |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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