Correlation Between Fidelity Total and Fidelity Bond

Can any of the company-specific risk be diversified away by investing in both Fidelity Total and Fidelity Bond 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 Total and Fidelity Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fidelity Total International and Fidelity Bond Index, you can compare the effects of market volatilities on Fidelity Total and Fidelity Bond 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 Total with a short position of Fidelity Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Total and Fidelity Bond.

Diversification Opportunities for Fidelity Total and Fidelity Bond

0.56

Correlation Coefficient

Fidelity Total  Fidelity Bond

Very weak diversification

The 3 months correlation between Fidelity and Fidelity is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Total International and Fidelity Bond Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Bond Index and Fidelity Total 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 Total International are associated (or correlated) with Fidelity Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Bond Index has no effect on the direction of Fidelity Total i.e., Fidelity Total and Fidelity Bond go up and down completely randomly.

Pair Corralation between Fidelity Total and Fidelity Bond

Assuming the 90 days horizon Fidelity Total is expected to generate 1.85 times less return on investment than Fidelity Bond. In addition to that, Fidelity Total is 2.77 times more volatile than Fidelity Bond Index. It trades about 0.01 of its total potential returns per unit of risk. Fidelity Bond Index is currently generating about 0.05 per unit of volatility. If you would invest  1,010  in Fidelity Bond Index on September 19, 2024 and sell it today you would earn a total of  22.00  from holding Fidelity Bond Index or generate 2.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Fidelity Total International  vs.  Fidelity Bond Index

Fidelity Total Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Total International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Bond Index

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Bond Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Total and Fidelity Bond

The main advantage of trading using opposite Fidelity Total and Fidelity Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Total position performs unexpectedly, Fidelity Bond 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 Bond will offset losses from the drop in Fidelity Bond's long position.

The idea behind Fidelity Total International and Fidelity Bond Index pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.