Correlation Between Fidelity California and Pace Municipal
Can any of the company-specific risk be diversified away by investing in both Fidelity California and Pace 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 California and Pace Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity California Municipal and Pace Municipal Fixed, you can compare the effects of market volatilities on Fidelity California and Pace 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 California with a short position of Pace Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity California and Pace Municipal.
Diversification Opportunities for Fidelity California and Pace Municipal
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Pace is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity California Municipal and Pace Municipal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Municipal Fixed and Fidelity California 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 California Municipal are associated (or correlated) with Pace Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Municipal Fixed has no effect on the direction of Fidelity California i.e., Fidelity California and Pace Municipal go up and down completely randomly.
Pair Corralation between Fidelity California and Pace Municipal
Assuming the 90 days horizon Fidelity California is expected to generate 1.11 times less return on investment than Pace Municipal. In addition to that, Fidelity California is 1.35 times more volatile than Pace Municipal Fixed. It trades about 0.17 of its total potential returns per unit of risk. Pace Municipal Fixed is currently generating about 0.25 per unit of volatility. If you would invest 1,185 in Pace Municipal Fixed on June 2, 2025 and sell it today you would earn a total of 19.00 from holding Pace Municipal Fixed or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity California Municipal vs. Pace Municipal Fixed
Performance |
| Timeline |
| Fidelity California |
| Pace Municipal Fixed |
Fidelity California and Pace Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity California and Pace Municipal
The main advantage of trading using opposite Fidelity California and Pace Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity California position performs unexpectedly, Pace 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 Pace Municipal will offset losses from the drop in Pace Municipal's long position.| Fidelity California vs. Virtus Nfj Large Cap | Fidelity California vs. Cb Large Cap | Fidelity California vs. Qs Large Cap | Fidelity California vs. Jhancock Disciplined Value |
| Pace Municipal vs. Mutual Of America | Pace Municipal vs. Touchstone Small Cap | Pace Municipal vs. Siit Small Cap | Pace Municipal vs. Sp Smallcap 600 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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