Correlation Between SPDR Barclays and Fidelity Corporate
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and Fidelity Corporate 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 SPDR Barclays and Fidelity Corporate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Intermediate and Fidelity Corporate Bond, you can compare the effects of market volatilities on SPDR Barclays and Fidelity Corporate 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 SPDR Barclays with a short position of Fidelity Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Fidelity Corporate.
Diversification Opportunities for SPDR Barclays and Fidelity Corporate
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Fidelity is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Intermediate and Fidelity Corporate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Corporate Bond and SPDR Barclays 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 SPDR Barclays Intermediate are associated (or correlated) with Fidelity Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Corporate Bond has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Fidelity Corporate go up and down completely randomly.
Pair Corralation between SPDR Barclays and Fidelity Corporate
Given the investment horizon of 90 days SPDR Barclays Intermediate is expected to generate 0.69 times more return on investment than Fidelity Corporate. However, SPDR Barclays Intermediate is 1.45 times less risky than Fidelity Corporate. It trades about -0.22 of its potential returns per unit of risk. Fidelity Corporate Bond is currently generating about -0.24 per unit of risk. If you would invest 3,248 in SPDR Barclays Intermediate on January 20, 2024 and sell it today you would lose (42.00) from holding SPDR Barclays Intermediate or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Intermediate vs. Fidelity Corporate Bond
Performance |
| Timeline |
| SPDR Barclays Interm |
| Fidelity Corporate Bond |
SPDR Barclays and Fidelity Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Fidelity Corporate
The main advantage of trading using opposite SPDR Barclays and Fidelity Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, Fidelity Corporate 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 Corporate will offset losses from the drop in Fidelity Corporate's long position.| SPDR Barclays vs. PrimeEnergy | SPDR Barclays vs. Israel Acquisitions Corp | SPDR Barclays vs. CKX Lands | SPDR Barclays vs. HUMANA INC |
| Fidelity Corporate vs. PrimeEnergy | Fidelity Corporate vs. Israel Acquisitions Corp | Fidelity Corporate vs. CKX Lands | Fidelity Corporate vs. HUMANA INC |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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