Correlation Between Ab Value and Fidelity Stock
Can any of the company-specific risk be diversified away by investing in both Ab Value and Fidelity Stock 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 Ab Value and Fidelity Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Value Fund and Fidelity Stock Selector, you can compare the effects of market volatilities on Ab Value and Fidelity Stock 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 Ab Value with a short position of Fidelity Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Fidelity Stock.
Diversification Opportunities for Ab Value and Fidelity Stock
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ABVCX and Fidelity is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Fidelity Stock Selector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Stock Selector and Ab Value 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 Ab Value Fund are associated (or correlated) with Fidelity Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Stock Selector has no effect on the direction of Ab Value i.e., Ab Value and Fidelity Stock go up and down completely randomly.
Pair Corralation between Ab Value and Fidelity Stock
Assuming the 90 days horizon Ab Value is expected to generate 1.06 times less return on investment than Fidelity Stock. In addition to that, Ab Value is 1.07 times more volatile than Fidelity Stock Selector. It trades about 0.08 of its total potential returns per unit of risk. Fidelity Stock Selector is currently generating about 0.09 per unit of volatility. If you would invest 2,376 in Fidelity Stock Selector on September 12, 2024 and sell it today you would earn a total of 531.00 from holding Fidelity Stock Selector or generate 22.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Value Fund vs. Fidelity Stock Selector
Performance |
| Timeline |
| Ab Value Fund |
| Fidelity Stock Selector |
Ab Value and Fidelity Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Value and Fidelity Stock
The main advantage of trading using opposite Ab Value and Fidelity Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value position performs unexpectedly, Fidelity Stock 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 Stock will offset losses from the drop in Fidelity Stock's long position.| Ab Value vs. Vanguard Value Index | Ab Value vs. Dodge Cox Stock | Ab Value vs. American Mutual Fund | Ab Value vs. American Funds American |
| Fidelity Stock vs. Ab Value Fund | Fidelity Stock vs. Western Asset Municipal | Fidelity Stock vs. T Rowe Price | Fidelity Stock vs. Red Oak Technology |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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