Correlation Between State Street and Fidelity Managed
Can any of the company-specific risk be diversified away by investing in both State Street and Fidelity Managed 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 State Street and Fidelity Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Target and Fidelity Managed Retirement, you can compare the effects of market volatilities on State Street and Fidelity Managed 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 State Street with a short position of Fidelity Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Fidelity Managed.
Diversification Opportunities for State Street and Fidelity Managed
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between State and Fidelity is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding State Street Target and Fidelity Managed Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Managed Ret and State Street 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 State Street Target are associated (or correlated) with Fidelity Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Managed Ret has no effect on the direction of State Street i.e., State Street and Fidelity Managed go up and down completely randomly.
Pair Corralation between State Street and Fidelity Managed
Assuming the 90 days horizon State Street Target is expected to generate 1.93 times more return on investment than Fidelity Managed. However, State Street is 1.93 times more volatile than Fidelity Managed Retirement. It trades about 0.07 of its potential returns per unit of risk. Fidelity Managed Retirement is currently generating about 0.08 per unit of risk. If you would invest 1,227 in State Street Target on April 23, 2025 and sell it today you would earn a total of 347.00 from holding State Street Target or generate 28.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
State Street Target vs. Fidelity Managed Retirement
Performance |
| Timeline |
| State Street Target |
| Fidelity Managed Ret |
State Street and Fidelity Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Fidelity Managed
The main advantage of trading using opposite State Street and Fidelity Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Fidelity Managed 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 Managed will offset losses from the drop in Fidelity Managed's long position.| State Street vs. State Street Target | State Street vs. State Street Target | State Street vs. Ssga International Stock | State Street vs. State Street Target |
| Fidelity Managed vs. Ivy Natural Resources | Fidelity Managed vs. Jennison Natural Resources | Fidelity Managed vs. Invesco Energy Fund | Fidelity Managed vs. Franklin Natural Resources |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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