Correlation Between Fidelity Capital and Dreyfus Appreciation
Can any of the company-specific risk be diversified away by investing in both Fidelity Capital and Dreyfus Appreciation 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 Dreyfus Appreciation 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 Dreyfus Appreciation Fund, you can compare the effects of market volatilities on Fidelity Capital and Dreyfus Appreciation 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 Dreyfus Appreciation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and Dreyfus Appreciation.
Diversification Opportunities for Fidelity Capital and Dreyfus Appreciation
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Dreyfus is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and Dreyfus Appreciation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Appreciation 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 Dreyfus Appreciation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Appreciation has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and Dreyfus Appreciation go up and down completely randomly.
Pair Corralation between Fidelity Capital and Dreyfus Appreciation
Assuming the 90 days horizon Fidelity Capital is expected to generate 1.94 times less return on investment than Dreyfus Appreciation. But when comparing it to its historical volatility, Fidelity Capital Income is 1.94 times less risky than Dreyfus Appreciation. It trades about 0.14 of its potential returns per unit of risk. Dreyfus Appreciation Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,578 in Dreyfus Appreciation Fund on September 13, 2024 and sell it today you would earn a total of 72.00 from holding Dreyfus Appreciation Fund or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Capital Income vs. Dreyfus Appreciation Fund
Performance |
| Timeline |
| Fidelity Capital Income |
| Dreyfus Appreciation |
Fidelity Capital and Dreyfus Appreciation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Capital and Dreyfus Appreciation
The main advantage of trading using opposite Fidelity Capital and Dreyfus Appreciation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital position performs unexpectedly, Dreyfus Appreciation 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 Dreyfus Appreciation will offset losses from the drop in Dreyfus Appreciation'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 |
| Dreyfus Appreciation vs. Alpine High Yield | Dreyfus Appreciation vs. Fidelity Capital Income | Dreyfus Appreciation vs. Jpmorgan High Yield | Dreyfus Appreciation vs. Prudential High Yield |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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