Correlation Between Fidelity Series and Us Treasury

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Can any of the company-specific risk be diversified away by investing in both Fidelity Series and Us Treasury 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 Series and Us Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Series Long Term and Us Treasury Long Term, you can compare the effects of market volatilities on Fidelity Series and Us Treasury 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 Series with a short position of Us Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and Us Treasury.

Diversification Opportunities for Fidelity Series and Us Treasury

1.0
  Correlation Coefficient

No risk reduction

The 3 months correlation between Fidelity and PRULX is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series Long Term and Us Treasury Long Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Treasury Long and Fidelity Series 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 Series Long Term are associated (or correlated) with Us Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Treasury Long has no effect on the direction of Fidelity Series i.e., Fidelity Series and Us Treasury go up and down completely randomly.

Pair Corralation between Fidelity Series and Us Treasury

Assuming the 90 days horizon Fidelity Series Long Term is expected to generate 0.96 times more return on investment than Us Treasury. However, Fidelity Series Long Term is 1.04 times less risky than Us Treasury. It trades about -0.02 of its potential returns per unit of risk. Us Treasury Long Term is currently generating about -0.03 per unit of risk. If you would invest  559.00  in Fidelity Series Long Term on April 22, 2024 and sell it today you would lose (2.00) from holding Fidelity Series Long Term or give up 0.36% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Fidelity Series Long Term  vs.  Us Treasury Long Term

 Performance 
       Timeline  
Fidelity Series Long 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Series Long Term are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Us Treasury Long 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Us Treasury Long Term are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Us Treasury is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Series and Us Treasury Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fidelity Series and Us Treasury

The main advantage of trading using opposite Fidelity Series and Us Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Series position performs unexpectedly, Us Treasury 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 Us Treasury will offset losses from the drop in Us Treasury's long position.
The idea behind Fidelity Series Long Term and Us Treasury Long Term pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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