Correlation Between Eafe Choice and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both Eafe Choice 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 Eafe Choice and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Eafe Choice and Fidelity Series 1000, you can compare the effects of market volatilities on Eafe Choice 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 Eafe Choice with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eafe Choice and Fidelity Series.
Diversification Opportunities for Eafe Choice and Fidelity Series
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eafe and Fidelity is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding The Eafe Choice 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 Eafe Choice 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 The Eafe Choice 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 Eafe Choice i.e., Eafe Choice and Fidelity Series go up and down completely randomly.
Pair Corralation between Eafe Choice and Fidelity Series
Assuming the 90 days horizon Eafe Choice is expected to generate 2.7 times less return on investment than Fidelity Series. In addition to that, Eafe Choice is 1.36 times more volatile than Fidelity Series 1000. It trades about 0.04 of its total potential returns per unit of risk. Fidelity Series 1000 is currently generating about 0.15 per unit of volatility. If you would invest 1,398 in Fidelity Series 1000 on September 2, 2024 and sell it today you would earn a total of 406.00 from holding Fidelity Series 1000 or generate 29.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Eafe Choice vs. Fidelity Series 1000
Performance |
| Timeline |
| Eafe Choice |
| Fidelity Series 1000 |
Eafe Choice and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eafe Choice and Fidelity Series
The main advantage of trading using opposite Eafe Choice and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eafe Choice 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.| Eafe Choice vs. Aqr Diversified Arbitrage | Eafe Choice vs. Prudential Core Conservative | Eafe Choice vs. Jhancock Diversified Macro | Eafe Choice vs. Calvert Conservative Allocation |
| Fidelity Series vs. Thrivent Income Fund | Fidelity Series vs. Touchstone Premium Yield | Fidelity Series vs. Artisan High Income | Fidelity Series vs. T Rowe Price |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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