Correlation Between SPDR Barclays and Fidelity Low

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

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

Diversification Opportunities for SPDR Barclays and Fidelity Low

-0.38

Correlation Coefficient

SPDR Barclays  Fidelity Low

Very good diversification

The 3 months correlation between SPDR and Fidelity is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Short and Fidelity Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Low Duration and SPDR Barclays 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 SPDR Barclays Short are associated (or correlated) with Fidelity Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Low Duration has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Fidelity Low go up and down completely randomly.

Pair Corralation between SPDR Barclays and Fidelity Low

Given the investment horizon of 90 days SPDR Barclays Short is expected to under-perform the Fidelity Low. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Barclays Short is 1.3 times less risky than Fidelity Low. The etf trades about -0.05 of its potential returns per unit of risk. The Fidelity Low Duration is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4,994  in Fidelity Low Duration on September 16, 2024 and sell it today you would earn a total of  48.00  from holding Fidelity Low Duration or generate 0.96% return on investment over 90 days.

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

SPDR Barclays Short  vs.  Fidelity Low Duration

SPDR Barclays Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR Barclays Short has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SPDR Barclays is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPDR Barclays and Fidelity Low

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

The idea behind SPDR Barclays Short and Fidelity Low Duration 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.