Correlation Between Fidelity Capital and The Arbitrage
Can any of the company-specific risk be diversified away by investing in both Fidelity Capital and The Arbitrage 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 Capital and The Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Capital Income and The Arbitrage Credit, you can compare the effects of market volatilities on Fidelity Capital and The Arbitrage 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 Capital with a short position of The Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and The Arbitrage.
Diversification Opportunities for Fidelity Capital and The Arbitrage
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and The is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and The Arbitrage Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Credit and Fidelity Capital 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 Capital Income are associated (or correlated) with The Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Credit has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and The Arbitrage go up and down completely randomly.
Pair Corralation between Fidelity Capital and The Arbitrage
Assuming the 90 days horizon Fidelity Capital Income is expected to generate 3.71 times more return on investment than The Arbitrage. However, Fidelity Capital is 3.71 times more volatile than The Arbitrage Credit. It trades about 0.16 of its potential returns per unit of risk. The Arbitrage Credit is currently generating about 0.24 per unit of risk. If you would invest 971.00 in Fidelity Capital Income on September 1, 2024 and sell it today you would earn a total of 64.00 from holding Fidelity Capital Income or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Fidelity Capital Income vs. The Arbitrage Credit
Performance |
| Timeline |
| Fidelity Capital Income |
| Arbitrage Credit |
Fidelity Capital and The Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Capital and The Arbitrage
The main advantage of trading using opposite Fidelity Capital and The Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital position performs unexpectedly, The Arbitrage 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 The Arbitrage will offset losses from the drop in The Arbitrage's long position.| Fidelity Capital vs. Fidelity High Income | Fidelity Capital vs. Fidelity New Markets | Fidelity Capital vs. Fidelity Total Bond | Fidelity Capital vs. Fidelity Balanced Fund |
| The Arbitrage vs. American Mutual Fund | The Arbitrage vs. Aqr Large Cap | The Arbitrage vs. M Large Cap | The Arbitrage vs. Tax Managed 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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