Correlation Between Applied Finance and Fidelity Low-priced
Can any of the company-specific risk be diversified away by investing in both Applied Finance and Fidelity Low-priced 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 Applied Finance and Fidelity Low-priced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Fidelity Low Priced Stock, you can compare the effects of market volatilities on Applied Finance and Fidelity Low-priced 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 Applied Finance with a short position of Fidelity Low-priced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Fidelity Low-priced.
Diversification Opportunities for Applied Finance and Fidelity Low-priced
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Applied and Fidelity is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Fidelity Low Priced Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Low Priced and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Fidelity Low-priced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Low Priced has no effect on the direction of Applied Finance i.e., Applied Finance and Fidelity Low-priced go up and down completely randomly.
Pair Corralation between Applied Finance and Fidelity Low-priced
Assuming the 90 days horizon Applied Finance Explorer is expected to generate 1.26 times more return on investment than Fidelity Low-priced. However, Applied Finance is 1.26 times more volatile than Fidelity Low Priced Stock. It trades about 0.27 of its potential returns per unit of risk. Fidelity Low Priced Stock is currently generating about 0.22 per unit of risk. If you would invest 2,169 in Applied Finance Explorer on November 3, 2024 and sell it today you would earn a total of 114.00 from holding Applied Finance Explorer or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Finance Explorer vs. Fidelity Low Priced Stock
Performance |
| Timeline |
| Applied Finance Explorer |
| Fidelity Low Priced |
Applied Finance and Fidelity Low-priced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Finance and Fidelity Low-priced
The main advantage of trading using opposite Applied Finance and Fidelity Low-priced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Fidelity Low-priced 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 Low-priced will offset losses from the drop in Fidelity Low-priced's long position.| Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
| Fidelity Low-priced vs. Dunham Large Cap | Fidelity Low-priced vs. Dodge Cox Stock | Fidelity Low-priced vs. Fisher Large Cap | Fidelity Low-priced vs. Touchstone Large Cap |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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