Correlation Between Fidelity Municipal and Pioneer Money

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

By analyzing existing cross correlation between Fidelity Municipal Income and Pioneer Money Market, you can compare the effects of market volatilities on Fidelity Municipal and Pioneer Money 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 Municipal with a short position of Pioneer Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Municipal and Pioneer Money.

Diversification Opportunities for Fidelity Municipal and Pioneer Money

0.17

Correlation Coefficient

Fidelity Municipal  Pioneer Money

Average diversification

The 3 months correlation between Fidelity and Pioneer is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Municipal Income and Pioneer Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Money Market and Fidelity Municipal 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 Municipal Income are associated (or correlated) with Pioneer Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Money Market has no effect on the direction of Fidelity Municipal i.e., Fidelity Municipal and Pioneer Money go up and down completely randomly.

Pair Corralation between Fidelity Municipal and Pioneer Money

If you would invest  1,212  in Fidelity Municipal Income on October 25, 2024 and sell it today you would earn a total of  4.00  from holding Fidelity Municipal Income or generate 0.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Fidelity Municipal Income  vs.  Pioneer Money Market

Fidelity Municipal Income

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pioneer Money Market

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Money Market are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pioneer Money 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 Municipal and Pioneer Money

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

The idea behind Fidelity Municipal Income and Pioneer Money Market 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.