Correlation Between Fidelity Low and SPDR Bloomberg

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

By analyzing existing cross correlation between Fidelity Low Duration and SPDR Bloomberg Investment, you can compare the effects of market volatilities on Fidelity Low and SPDR Bloomberg 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 Low with a short position of SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Low and SPDR Bloomberg.

Diversification Opportunities for Fidelity Low and SPDR Bloomberg

0.96

Correlation Coefficient

Fidelity Low  SPDR Bloomberg

Almost no diversification

The 3 months correlation between Fidelity and SPDR is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Low Duration and SPDR Bloomberg Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Investment and Fidelity Low 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 Low Duration are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Investment has no effect on the direction of Fidelity Low i.e., Fidelity Low and SPDR Bloomberg go up and down completely randomly.

Pair Corralation between Fidelity Low and SPDR Bloomberg

Given the investment horizon of 90 days Fidelity Low is expected to generate 1.19 times less return on investment than SPDR Bloomberg. In addition to that, Fidelity Low is 1.86 times more volatile than SPDR Bloomberg Investment. It trades about 0.2 of its total potential returns per unit of risk. SPDR Bloomberg Investment is currently generating about 0.45 per unit of volatility. If you would invest  2,865  in SPDR Bloomberg Investment on September 17, 2024 and sell it today you would earn a total of  213.00  from holding SPDR Bloomberg Investment or generate 7.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	71.38%
Values	Daily Returns

Fidelity Low Duration  vs.  SPDR Bloomberg Investment

Fidelity Low Duration

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Low Duration are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Fidelity Low is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SPDR Bloomberg Investment

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg Investment are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, SPDR Bloomberg is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Low and SPDR Bloomberg

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

The idea behind Fidelity Low Duration and SPDR Bloomberg Investment 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.