Correlation Between Fabwx and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both Fabwx 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 Fabwx and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabwx and Fidelity Series Emerging, you can compare the effects of market volatilities on Fabwx 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 Fabwx with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabwx and Fidelity Series.
Diversification Opportunities for Fabwx and Fidelity Series
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fabwx and Fidelity is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fabwx and Fidelity Series Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Emerging and Fabwx 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 Fabwx 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 Emerging has no effect on the direction of Fabwx i.e., Fabwx and Fidelity Series go up and down completely randomly.
Pair Corralation between Fabwx and Fidelity Series
Assuming the 90 days horizon Fabwx is expected to generate 1.02 times more return on investment than Fidelity Series. However, Fabwx is 1.02 times more volatile than Fidelity Series Emerging. It trades about 0.42 of its potential returns per unit of risk. Fidelity Series Emerging is currently generating about 0.08 per unit of risk. If you would invest 1,499 in Fabwx on October 28, 2024 and sell it today you would earn a total of 96.00 from holding Fabwx or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Fabwx vs. Fidelity Series Emerging
Performance |
| Timeline |
| Fabwx |
| Fidelity Series Emerging |
Fabwx and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabwx and Fidelity Series
The main advantage of trading using opposite Fabwx and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabwx 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.| Fabwx vs. Growth Strategy Fund | Fabwx vs. Artisan Developing World | Fabwx vs. Embark Commodity Strategy | Fabwx vs. Transamerica Emerging Markets |
| Fidelity Series vs. Furyax | Fidelity Series vs. Fznopx | Fidelity Series vs. Fdzbpx | Fidelity Series vs. Fbanjx |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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