Correlation Between Fidelity California and Catalyst Hedged
Can any of the company-specific risk be diversified away by investing in both Fidelity California and Catalyst Hedged 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 California and Catalyst Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity California Municipal and Catalyst Hedged Modity, you can compare the effects of market volatilities on Fidelity California and Catalyst Hedged 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 California with a short position of Catalyst Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity California and Catalyst Hedged.
Diversification Opportunities for Fidelity California and Catalyst Hedged
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fidelity and CATALYST is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity California Municipal and Catalyst Hedged Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Hedged Modity and Fidelity California 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 California Municipal are associated (or correlated) with Catalyst Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Hedged Modity has no effect on the direction of Fidelity California i.e., Fidelity California and Catalyst Hedged go up and down completely randomly.
Pair Corralation between Fidelity California and Catalyst Hedged
Assuming the 90 days horizon Fidelity California Municipal is expected to generate 0.33 times more return on investment than Catalyst Hedged. However, Fidelity California Municipal is 3.04 times less risky than Catalyst Hedged. It trades about 0.0 of its potential returns per unit of risk. Catalyst Hedged Modity is currently generating about -0.07 per unit of risk. If you would invest 1,212 in Fidelity California Municipal on October 26, 2024 and sell it today you would earn a total of 0.00 from holding Fidelity California Municipal or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.33% |
Values | Daily Returns |
Fidelity California Municipal vs. Catalyst Hedged Modity
Performance |
Timeline |
Fidelity California |
Catalyst Hedged Modity |
Fidelity California and Catalyst Hedged Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity California and Catalyst Hedged
The main advantage of trading using opposite Fidelity California and Catalyst Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity California position performs unexpectedly, Catalyst Hedged 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 Catalyst Hedged will offset losses from the drop in Catalyst Hedged's long position.Fidelity California vs. Mesirow Financial High | ||
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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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