Correlation Between American Mutual and Fidelity Managed
Can any of the company-specific risk be diversified away by investing in both American Mutual and Fidelity Managed 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 Managed 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 Managed Retirement, you can compare the effects of market volatilities on American Mutual and Fidelity Managed 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 Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Fidelity Managed.
Diversification Opportunities for American Mutual and Fidelity Managed
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Fidelity is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Fidelity Managed Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Managed Ret 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 Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Managed Ret has no effect on the direction of American Mutual i.e., American Mutual and Fidelity Managed go up and down completely randomly.
Pair Corralation between American Mutual and Fidelity Managed
Assuming the 90 days horizon American Mutual Fund is expected to generate 1.87 times more return on investment than Fidelity Managed. However, American Mutual is 1.87 times more volatile than Fidelity Managed Retirement. It trades about 0.13 of its potential returns per unit of risk. Fidelity Managed Retirement is currently generating about 0.11 per unit of risk. If you would invest 4,724 in American Mutual Fund on August 29, 2024 and sell it today you would earn a total of 1,266 from holding American Mutual Fund or generate 26.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Fidelity Managed Retirement
Performance |
| Timeline |
| American Mutual |
| Fidelity Managed Ret |
American Mutual and Fidelity Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Fidelity Managed
The main advantage of trading using opposite American Mutual and Fidelity Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Fidelity Managed 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 Managed will offset losses from the drop in Fidelity Managed's 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 Managed vs. Dunham Large Cap | Fidelity Managed vs. Cb Large Cap | Fidelity Managed vs. American Mutual Fund | Fidelity Managed vs. Aqr 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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