Correlation Between American Mutual and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both American Mutual and Fidelity Series 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 American Mutual and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Fidelity Series 1000, you can compare the effects of market volatilities on American Mutual and Fidelity Series 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 American Mutual with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Fidelity Series.
Diversification Opportunities for American Mutual and Fidelity Series
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Fidelity is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Fidelity Series 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series 1000 and American Mutual 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 American Mutual Fund are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series 1000 has no effect on the direction of American Mutual i.e., American Mutual and Fidelity Series go up and down completely randomly.
Pair Corralation between American Mutual and Fidelity Series
Assuming the 90 days horizon American Mutual is expected to generate 1.19 times less return on investment than Fidelity Series. But when comparing it to its historical volatility, American Mutual Fund is 1.19 times less risky than Fidelity Series. It trades about 0.14 of its potential returns per unit of risk. Fidelity Series 1000 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,485 in Fidelity Series 1000 on August 29, 2024 and sell it today you would earn a total of 314.00 from holding Fidelity Series 1000 or generate 21.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Fidelity Series 1000
Performance |
| Timeline |
| American Mutual |
| Fidelity Series 1000 |
American Mutual and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Fidelity Series
The main advantage of trading using opposite American Mutual and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Fidelity Series 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 Series will offset losses from the drop in Fidelity Series' long position.| American Mutual vs. Amcap Fund Class | American Mutual vs. American Balanced Fund | American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund |
| Fidelity Series vs. T Rowe Price | Fidelity Series vs. Bbh Limited Duration | Fidelity Series vs. Falcon Focus Scv | Fidelity Series vs. Iaadx |
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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