Correlation Between Fidelity Capital and Frost Kempner
Can any of the company-specific risk be diversified away by investing in both Fidelity Capital and Frost Kempner 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 Frost Kempner 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 Frost Kempner Treasury, you can compare the effects of market volatilities on Fidelity Capital and Frost Kempner 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 Frost Kempner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and Frost Kempner.
Diversification Opportunities for Fidelity Capital and Frost Kempner
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Frost is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and Frost Kempner Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Kempner Treasury 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 Frost Kempner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Kempner Treasury has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and Frost Kempner go up and down completely randomly.
Pair Corralation between Fidelity Capital and Frost Kempner
Assuming the 90 days horizon Fidelity Capital Income is expected to generate 2.91 times more return on investment than Frost Kempner. However, Fidelity Capital is 2.91 times more volatile than Frost Kempner Treasury. It trades about 0.36 of its potential returns per unit of risk. Frost Kempner Treasury is currently generating about 0.22 per unit of risk. If you would invest 1,016 in Fidelity Capital Income on October 25, 2024 and sell it today you would earn a total of 23.00 from holding Fidelity Capital Income or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Capital Income vs. Frost Kempner Treasury
Performance |
| Timeline |
| Fidelity Capital Income |
| Frost Kempner Treasury |
Fidelity Capital and Frost Kempner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Capital and Frost Kempner
The main advantage of trading using opposite Fidelity Capital and Frost Kempner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital position performs unexpectedly, Frost Kempner 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 Frost Kempner will offset losses from the drop in Frost Kempner'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 |
| Frost Kempner vs. Small Cap Value | Frost Kempner vs. William Blair Small | Frost Kempner vs. Ultrasmall Cap Profund Ultrasmall Cap | Frost Kempner vs. American Century Etf |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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