Correlation Between Fidelity Sai and Tax Exempt

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

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

Diversification Opportunities for Fidelity Sai and Tax Exempt

0.38

Correlation Coefficient

Fidelity Sai  Tax Exempt

Weak diversification

The 3 months correlation between Fidelity and Tax is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai Inflationfocused and Tax Exempt Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tax Exempt Bond and Fidelity Sai 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 Sai Inflationfocused are associated (or correlated) with Tax Exempt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tax Exempt Bond has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and Tax Exempt go up and down completely randomly.

Pair Corralation between Fidelity Sai and Tax Exempt

Assuming the 90 days horizon Fidelity Sai Inflationfocused is expected to under-perform the Tax Exempt. In addition to that, Fidelity Sai is 3.94 times more volatile than Tax Exempt Bond Fund. It trades about -0.1 of its total potential returns per unit of risk. Tax Exempt Bond Fund is currently generating about -0.36 per unit of volatility. If you would invest  2,217  in Tax Exempt Bond Fund on September 26, 2024 and sell it today you would lose (38.00) from holding Tax Exempt Bond Fund or give up 1.71% of portfolio value over 90 days.

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

Fidelity Sai Inflationfocused  vs.  Tax Exempt Bond Fund

Fidelity Sai Inflati

Risk-Adjusted Performance

0 of 100

Very Weak

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

Tax Exempt Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tax Exempt Bond Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Tax Exempt 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 Sai and Tax Exempt

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

The idea behind Fidelity Sai Inflationfocused and Tax Exempt Bond Fund 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.