Correlation Between Fidelity Large and Dfa Municipal
Can any of the company-specific risk be diversified away by investing in both Fidelity Large and Dfa Municipal 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 Large and Dfa Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Large Cap and Dfa Municipal Real, you can compare the effects of market volatilities on Fidelity Large and Dfa Municipal 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 Large with a short position of Dfa Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Large and Dfa Municipal.
Diversification Opportunities for Fidelity Large and Dfa Municipal
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Dfa is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Large Cap and Dfa Municipal Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Municipal Real and Fidelity Large 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 Large Cap are associated (or correlated) with Dfa Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Municipal Real has no effect on the direction of Fidelity Large i.e., Fidelity Large and Dfa Municipal go up and down completely randomly.
Pair Corralation between Fidelity Large and Dfa Municipal
Assuming the 90 days horizon Fidelity Large Cap is expected to generate 10.61 times more return on investment than Dfa Municipal. However, Fidelity Large is 10.61 times more volatile than Dfa Municipal Real. It trades about 0.45 of its potential returns per unit of risk. Dfa Municipal Real is currently generating about 0.26 per unit of risk. If you would invest 1,445 in Fidelity Large Cap on April 25, 2025 and sell it today you would earn a total of 296.00 from holding Fidelity Large Cap or generate 20.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Large Cap vs. Dfa Municipal Real
Performance |
| Timeline |
| Fidelity Large Cap |
| Dfa Municipal Real |
Fidelity Large and Dfa Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Large and Dfa Municipal
The main advantage of trading using opposite Fidelity Large and Dfa Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Large position performs unexpectedly, Dfa Municipal 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 Dfa Municipal will offset losses from the drop in Dfa Municipal's long position.| Fidelity Large vs. Locorr Dynamic Equity | Fidelity Large vs. Us Vector Equity | Fidelity Large vs. Pace International Equity | Fidelity Large vs. Ab Select Equity |
| Dfa Municipal vs. Cmg Ultra Short | Dfa Municipal vs. Lord Abbett Short | Dfa Municipal vs. Leader Short Term Bond | Dfa Municipal vs. Aqr Long Short Equity |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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