Correlation Between Fidelity Bond and Fidelity Total

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

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

Diversification Opportunities for Fidelity Bond and Fidelity Total

0.36

Correlation Coefficient

Fidelity Bond  Fidelity Total

Weak diversification

The 3 months correlation between Fidelity and Fidelity is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Bond Index and Fidelity Total International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Total Inter and Fidelity Bond 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 Bond Index are associated (or correlated) with Fidelity Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Total Inter has no effect on the direction of Fidelity Bond i.e., Fidelity Bond and Fidelity Total go up and down completely randomly.

Pair Corralation between Fidelity Bond and Fidelity Total

Assuming the 90 days horizon Fidelity Bond Index is expected to under-perform the Fidelity Total. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Bond Index is 2.64 times less risky than Fidelity Total. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Fidelity Total International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,194  in Fidelity Total International on September 13, 2024 and sell it today you would earn a total of  7.00  from holding Fidelity Total International or generate 0.59% return on investment over 90 days.

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

Fidelity Bond Index  vs.  Fidelity Total International

Fidelity Bond Index

Risk-Adjusted Performance

0 of 100

Very Weak

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

Fidelity Total Inter

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Total International are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Fidelity Total 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 Bond and Fidelity Total

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

The idea behind Fidelity Bond Index and Fidelity Total International 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.