Correlation Between Fidelity Canada and Aggressive Growth
Can any of the company-specific risk be diversified away by investing in both Fidelity Canada and Aggressive Growth 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 Fidelity Canada and Aggressive Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Canada Fund and Aggressive Growth Allocation, you can compare the effects of market volatilities on Fidelity Canada and Aggressive Growth 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 Fidelity Canada with a short position of Aggressive Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Canada and Aggressive Growth.
Diversification Opportunities for Fidelity Canada and Aggressive Growth
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Aggressive is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Canada Fund and Aggressive Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Growth and Fidelity Canada 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 Fidelity Canada Fund are associated (or correlated) with Aggressive Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Growth has no effect on the direction of Fidelity Canada i.e., Fidelity Canada and Aggressive Growth go up and down completely randomly.
Pair Corralation between Fidelity Canada and Aggressive Growth
Assuming the 90 days horizon Fidelity Canada Fund is expected to generate 1.15 times more return on investment than Aggressive Growth. However, Fidelity Canada is 1.15 times more volatile than Aggressive Growth Allocation. It trades about 0.19 of its potential returns per unit of risk. Aggressive Growth Allocation is currently generating about 0.1 per unit of risk. If you would invest 7,181 in Fidelity Canada Fund on August 27, 2024 and sell it today you would earn a total of 204.00 from holding Fidelity Canada Fund or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Canada Fund vs. Aggressive Growth Allocation
Performance |
| Timeline |
| Fidelity Canada |
| Aggressive Growth |
Fidelity Canada and Aggressive Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Canada and Aggressive Growth
The main advantage of trading using opposite Fidelity Canada and Aggressive Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Canada position performs unexpectedly, Aggressive Growth 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 Aggressive Growth will offset losses from the drop in Aggressive Growth's long position.| Fidelity Canada vs. Franklin High Yield | Fidelity Canada vs. Nuveen Minnesota Municipal | Fidelity Canada vs. The National Tax Free | Fidelity Canada vs. Gamco Global Telecommunications |
| Aggressive Growth vs. Fidelity Asset Manager | Aggressive Growth vs. Fidelity Asset Manager | Aggressive Growth vs. Fidelity Asset Manager | Aggressive Growth vs. Fidelity International Capital |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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