Correlation Between Materials Portfolio and New York

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Materials Portfolio and New York 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 Materials Portfolio and New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materials Portfolio Fidelity and New York Municipal, you can compare the effects of market volatilities on Materials Portfolio and New York 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 Materials Portfolio with a short position of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materials Portfolio and New York.

Diversification Opportunities for Materials Portfolio and New York

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Materials and New is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Materials Portfolio Fidelity and New York Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Municipal and Materials Portfolio 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 Materials Portfolio Fidelity are associated (or correlated) with New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Municipal has no effect on the direction of Materials Portfolio i.e., Materials Portfolio and New York go up and down completely randomly.

Pair Corralation between Materials Portfolio and New York

Assuming the 90 days horizon Materials Portfolio Fidelity is expected to under-perform the New York. In addition to that, Materials Portfolio is 7.69 times more volatile than New York Municipal. It trades about -0.02 of its total potential returns per unit of risk. New York Municipal is currently generating about 0.14 per unit of volatility. If you would invest  1,262  in New York Municipal on October 5, 2024 and sell it today you would earn a total of  81.00  from holding New York Municipal or generate 6.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Materials Portfolio Fidelity  vs.  New York Municipal

 Performance 
       Timeline  
Materials Portfolio 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Materials Portfolio Fidelity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.
New York Municipal 

Risk-Adjusted Performance

0 of 100

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

Materials Portfolio and New York Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Materials Portfolio and New York

The main advantage of trading using opposite Materials Portfolio and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materials Portfolio position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.
The idea behind Materials Portfolio Fidelity and New York Municipal 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.
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

Other Complementary Tools

Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon