Correlation Between Amana Participation and Fidelity Large
Can any of the company-specific risk be diversified away by investing in both Amana Participation and Fidelity Large 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 Amana Participation and Fidelity Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amana Participation Fund and Fidelity Large Cap, you can compare the effects of market volatilities on Amana Participation and Fidelity Large 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 Amana Participation with a short position of Fidelity Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Participation and Fidelity Large.
Diversification Opportunities for Amana Participation and Fidelity Large
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amana and Fidelity is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Amana Participation Fund and Fidelity Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Large Cap and Amana Participation 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 Amana Participation Fund are associated (or correlated) with Fidelity Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Large Cap has no effect on the direction of Amana Participation i.e., Amana Participation and Fidelity Large go up and down completely randomly.
Pair Corralation between Amana Participation and Fidelity Large
Assuming the 90 days horizon Amana Participation Fund is not expected to generate positive returns. However, Amana Participation Fund is 7.82 times less risky than Fidelity Large. It waists most of its returns potential to compensate for thr risk taken. Fidelity Large is generating about 0.21 per unit of risk. If you would invest 1,551 in Fidelity Large Cap on October 21, 2024 and sell it today you would earn a total of 51.00 from holding Fidelity Large Cap or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amana Participation Fund vs. Fidelity Large Cap
Performance |
| Timeline |
| Amana Participation |
| Fidelity Large Cap |
Amana Participation and Fidelity Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amana Participation and Fidelity Large
The main advantage of trading using opposite Amana Participation and Fidelity Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Participation position performs unexpectedly, Fidelity Large 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 Large will offset losses from the drop in Fidelity Large's long position.| Amana Participation vs. Vest Large Cap | Amana Participation vs. Avantis Large Cap | Amana Participation vs. Touchstone Large Cap | Amana Participation vs. Guidemark Large Cap |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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