Correlation Between Maryland Short-term and Fidelity Sustainable

Can any of the company-specific risk be diversified away by investing in both Maryland Short-term and Fidelity Sustainable 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 Maryland Short-term and Fidelity Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Maryland Short Term Tax Free and Fidelity Sustainable Target, you can compare the effects of market volatilities on Maryland Short-term and Fidelity Sustainable 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 Maryland Short-term with a short position of Fidelity Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maryland Short-term and Fidelity Sustainable.

Diversification Opportunities for Maryland Short-term and Fidelity Sustainable

0.58

Correlation Coefficient

Maryland Short-term  Fidelity Sustainable

Very weak diversification

The 3 months correlation between Maryland and Fidelity is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Maryland Short Term Tax Free and Fidelity Sustainable Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sustainable and Maryland Short-term 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 Maryland Short Term Tax Free are associated (or correlated) with Fidelity Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sustainable has no effect on the direction of Maryland Short-term i.e., Maryland Short-term and Fidelity Sustainable go up and down completely randomly.

Pair Corralation between Maryland Short-term and Fidelity Sustainable

Assuming the 90 days horizon Maryland Short-term is expected to generate 4.92 times less return on investment than Fidelity Sustainable. But when comparing it to its historical volatility, Maryland Short Term Tax Free is 7.83 times less risky than Fidelity Sustainable. It trades about 0.34 of its potential returns per unit of risk. Fidelity Sustainable Target is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,028  in Fidelity Sustainable Target on May 6, 2025 and sell it today you would earn a total of  81.00  from holding Fidelity Sustainable Target or generate 7.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Maryland Short Term Tax Free  vs.  Fidelity Sustainable Target

Maryland Short Term

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Maryland Short Term Tax Free are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Maryland Short-term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Sustainable

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sustainable Target are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Sustainable may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Maryland Short-term and Fidelity Sustainable

The main advantage of trading using opposite Maryland Short-term and Fidelity Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maryland Short-term position performs unexpectedly, Fidelity Sustainable 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 Sustainable will offset losses from the drop in Fidelity Sustainable's long position.

The idea behind Maryland Short Term Tax Free and Fidelity Sustainable Target 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.