Correlation Between Prudential California and Fidelity California
Can any of the company-specific risk be diversified away by investing in both Prudential California and Fidelity California 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 Prudential California and Fidelity California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential California Muni and Fidelity California Municipal, you can compare the effects of market volatilities on Prudential California and Fidelity California 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 Prudential California with a short position of Fidelity California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential California and Fidelity California.
Diversification Opportunities for Prudential California and Fidelity California
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Prudential and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Prudential California Muni and Fidelity California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity California and Prudential 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 Prudential California Muni are associated (or correlated) with Fidelity California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity California has no effect on the direction of Prudential California i.e., Prudential California and Fidelity California go up and down completely randomly.
Pair Corralation between Prudential California and Fidelity California
Assuming the 90 days horizon Prudential California is expected to generate 1.39 times less return on investment than Fidelity California. But when comparing it to its historical volatility, Prudential California Muni is 1.56 times less risky than Fidelity California. It trades about 0.37 of its potential returns per unit of risk. Fidelity California Municipal is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,197 in Fidelity California Municipal on September 4, 2025 and sell it today you would earn a total of 41.00 from holding Fidelity California Municipal or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential California Muni vs. Fidelity California Municipal
Performance |
| Timeline |
| Prudential California |
| Fidelity California |
Prudential California and Fidelity California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential California and Fidelity California
The main advantage of trading using opposite Prudential California and Fidelity California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential California position performs unexpectedly, Fidelity California 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 California will offset losses from the drop in Fidelity California's long position.| Prudential California vs. Qs Moderate Growth | Prudential California vs. Templeton Growth Fund | Prudential California vs. Auer Growth Fund | Prudential California vs. Qs Growth Fund |
| Fidelity California vs. Sterling Capital Behavioral | Fidelity California vs. Qs Large Cap | Fidelity California vs. Knights Of Umbus | Fidelity California vs. Pnc Balanced Allocation |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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