Correlation Between Fidelity California and Moderate Balanced
Can any of the company-specific risk be diversified away by investing in both Fidelity California and Moderate Balanced 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 Moderate Balanced 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 Moderate Balanced Allocation, you can compare the effects of market volatilities on Fidelity California and Moderate Balanced 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 Moderate Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity California and Moderate Balanced.
Diversification Opportunities for Fidelity California and Moderate Balanced
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Moderate is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity California Municipal and Moderate Balanced Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderate Balanced 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 Moderate Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderate Balanced has no effect on the direction of Fidelity California i.e., Fidelity California and Moderate Balanced go up and down completely randomly.
Pair Corralation between Fidelity California and Moderate Balanced
Assuming the 90 days horizon Fidelity California Municipal is expected to under-perform the Moderate Balanced. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity California Municipal is 3.34 times less risky than Moderate Balanced. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Moderate Balanced Allocation is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,174 in Moderate Balanced Allocation on April 30, 2025 and sell it today you would earn a total of 108.00 from holding Moderate Balanced Allocation or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity California Municipal vs. Moderate Balanced Allocation
Performance |
| Timeline |
| Fidelity California |
| Moderate Balanced |
Fidelity California and Moderate Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity California and Moderate Balanced
The main advantage of trading using opposite Fidelity California and Moderate Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity California position performs unexpectedly, Moderate Balanced 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 Moderate Balanced will offset losses from the drop in Moderate Balanced's long position.| Fidelity California vs. Artisan High Income | Fidelity California vs. Multisector Bond Sma | Fidelity California vs. Ab Bond Inflation | Fidelity California vs. Bts Tactical Fixed |
| Moderate Balanced vs. Fidelity Series Emerging | Moderate Balanced vs. Nasdaq 100 2x Strategy | Moderate Balanced vs. Balanced Strategy Fund | Moderate Balanced vs. Sa Emerging Markets |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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