Correlation Between Fidelity Salem and Fidelity Income
Can any of the company-specific risk be diversified away by investing in both Fidelity Salem and Fidelity Income 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 Salem and Fidelity Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Salem Street and Fidelity Income Replacement, you can compare the effects of market volatilities on Fidelity Salem and Fidelity Income 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 Salem with a short position of Fidelity Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Salem and Fidelity Income.
Diversification Opportunities for Fidelity Salem and Fidelity Income
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Salem Street and Fidelity Income Replacement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Income Repl and Fidelity Salem 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 Salem Street are associated (or correlated) with Fidelity Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Income Repl has no effect on the direction of Fidelity Salem i.e., Fidelity Salem and Fidelity Income go up and down completely randomly.
Pair Corralation between Fidelity Salem and Fidelity Income
Assuming the 90 days horizon Fidelity Salem Street is expected to under-perform the Fidelity Income. In addition to that, Fidelity Salem is 2.93 times more volatile than Fidelity Income Replacement. It trades about -0.09 of its total potential returns per unit of risk. Fidelity Income Replacement is currently generating about -0.02 per unit of volatility. If you would invest 5,481 in Fidelity Income Replacement on September 16, 2024 and sell it today you would lose (24.00) from holding Fidelity Income Replacement or give up 0.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Fidelity Salem Street vs. Fidelity Income Replacement
Performance |
Timeline |
Fidelity Salem Street |
Fidelity Income Repl |
Fidelity Salem and Fidelity Income Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity Salem and Fidelity Income
The main advantage of trading using opposite Fidelity Salem and Fidelity Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Salem position performs unexpectedly, Fidelity Income 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 Income will offset losses from the drop in Fidelity Income's long position.Fidelity Salem vs. Fidelity Freedom 2015 | Fidelity Salem vs. Fidelity Puritan Fund | Fidelity Salem vs. Fidelity Puritan Fund | Fidelity Salem vs. Fidelity Pennsylvania Municipal |
Fidelity Income vs. Fidelity Income Replacement | Fidelity Income vs. Fidelity Asset Manager | Fidelity Income vs. Fidelity Income Replacement | Fidelity Income vs. Telecommunications Portfolio Fidelity |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |