Correlation Between Fidelity Income and Fidelity Minnesota

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

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

Diversification Opportunities for Fidelity Income and Fidelity Minnesota

0.7

Correlation Coefficient

Fidelity Income  Fidelity Minnesota

Poor diversification

The 3 months correlation between Fidelity and Fidelity is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Income Replacement and Fidelity Minnesota Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Minnesota and Fidelity Income 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 Income Replacement are associated (or correlated) with Fidelity Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Minnesota has no effect on the direction of Fidelity Income i.e., Fidelity Income and Fidelity Minnesota go up and down completely randomly.

Pair Corralation between Fidelity Income and Fidelity Minnesota

Assuming the 90 days horizon Fidelity Income Replacement is expected to generate 1.23 times more return on investment than Fidelity Minnesota. However, Fidelity Income is 1.23 times more volatile than Fidelity Minnesota Municipal. It trades about 0.12 of its potential returns per unit of risk. Fidelity Minnesota Municipal is currently generating about -0.03 per unit of risk. If you would invest  5,280  in Fidelity Income Replacement on December 28, 2024 and sell it today you would earn a total of  103.00  from holding Fidelity Income Replacement or generate 1.95% return on investment over 90 days.

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

Fidelity Income Replacement  vs.  Fidelity Minnesota Municipal

Fidelity Income Repl

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Income Replacement are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Minnesota

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Minnesota Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Fidelity Minnesota 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 Income and Fidelity Minnesota

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

The idea behind Fidelity Income Replacement and Fidelity Minnesota 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.

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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.