Correlation Between Federated High and Fidelity Capital
Can any of the company-specific risk be diversified away by investing in both Federated High and Fidelity Capital 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 Federated High and Fidelity Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated High Yield and Fidelity Capital Income, you can compare the effects of market volatilities on Federated High and Fidelity Capital 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 Federated High with a short position of Fidelity Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated High and Fidelity Capital.
Diversification Opportunities for Federated High and Fidelity Capital
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and Fidelity is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Federated High Yield and Fidelity Capital Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Capital Income and Federated High 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 Federated High Yield are associated (or correlated) with Fidelity Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Capital Income has no effect on the direction of Federated High i.e., Federated High and Fidelity Capital go up and down completely randomly.
Pair Corralation between Federated High and Fidelity Capital
Assuming the 90 days horizon Federated High is expected to generate 1.43 times less return on investment than Fidelity Capital. But when comparing it to its historical volatility, Federated High Yield is 1.78 times less risky than Fidelity Capital. It trades about 0.44 of its potential returns per unit of risk. Fidelity Capital Income is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,016 in Fidelity Capital Income on March 26, 2025 and sell it today you would earn a total of 23.00 from holding Fidelity Capital Income or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated High Yield vs. Fidelity Capital Income
Performance |
| Timeline |
| Federated High Yield |
| Fidelity Capital Income |
Federated High and Fidelity Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated High and Fidelity Capital
The main advantage of trading using opposite Federated High and Fidelity Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated High position performs unexpectedly, Fidelity Capital 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 Capital will offset losses from the drop in Fidelity Capital's long position.| Federated High vs. Ab Global Risk | Federated High vs. Nationwide Highmark Bond | Federated High vs. Goldman Sachs High | Federated High vs. Pace High Yield |
| Fidelity Capital vs. Fidelity Freedom 2015 | Fidelity Capital vs. Fidelity Puritan Fund | Fidelity Capital vs. Fidelity Puritan Fund | Fidelity Capital vs. Fidelity Pennsylvania Municipal |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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