Correlation Between Fidelity High and JPMorgan Short
Can any of the company-specific risk be diversified away by investing in both Fidelity High and JPMorgan Short 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 High and JPMorgan Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity High Yield and JPMorgan Short Duration, you can compare the effects of market volatilities on Fidelity High and JPMorgan Short 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 High with a short position of JPMorgan Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity High and JPMorgan Short.
Diversification Opportunities for Fidelity High and JPMorgan Short
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and JPMorgan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity High Yield and JPMorgan Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Short Duration and Fidelity 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 Fidelity High Yield are associated (or correlated) with JPMorgan Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Short Duration has no effect on the direction of Fidelity High i.e., Fidelity High and JPMorgan Short go up and down completely randomly.
Pair Corralation between Fidelity High and JPMorgan Short
Given the investment horizon of 90 days Fidelity High Yield is expected to generate 2.22 times more return on investment than JPMorgan Short. However, Fidelity High is 2.22 times more volatile than JPMorgan Short Duration. It trades about 0.28 of its potential returns per unit of risk. JPMorgan Short Duration is currently generating about 0.38 per unit of risk. If you would invest 4,717 in Fidelity High Yield on February 21, 2024 and sell it today you would earn a total of 85.00 from holding Fidelity High Yield or generate 1.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Fidelity High Yield vs. JPMorgan Short Duration
Performance |
Timeline |
Fidelity High Yield |
JPMorgan Short Duration |
Fidelity High and JPMorgan Short Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity High and JPMorgan Short
The main advantage of trading using opposite Fidelity High and JPMorgan Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity High position performs unexpectedly, JPMorgan Short 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 JPMorgan Short will offset losses from the drop in JPMorgan Short's long position.Fidelity High vs. WisdomTree Corporate Bond | Fidelity High vs. WisdomTree Yield Enhanced | Fidelity High vs. WisdomTree Interest Rate | Fidelity High vs. WisdomTree Yield Enhanced |
JPMorgan Short vs. NuShares Enhanced Yield | JPMorgan Short vs. Nuveen ESG Aggregate | JPMorgan Short vs. NuShares ETF Trust | JPMorgan Short vs. Virtus Newfleet Multi Sector |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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