Correlation Between Fidelity Capital and Fidelity Strategic
Can any of the company-specific risk be diversified away by investing in both Fidelity Capital and Fidelity Strategic 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 Fidelity Strategic 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 Fidelity Strategic Dividend, you can compare the effects of market volatilities on Fidelity Capital and Fidelity Strategic 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 Fidelity Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and Fidelity Strategic.
Diversification Opportunities for Fidelity Capital and Fidelity Strategic
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and Fidelity Strategic Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Strategic 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 Fidelity Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Strategic has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and Fidelity Strategic go up and down completely randomly.
Pair Corralation between Fidelity Capital and Fidelity Strategic
Assuming the 90 days horizon Fidelity Capital is expected to generate 1.6 times less return on investment than Fidelity Strategic. But when comparing it to its historical volatility, Fidelity Capital Income is 1.64 times less risky than Fidelity Strategic. It trades about 0.14 of its potential returns per unit of risk. Fidelity Strategic Dividend is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,631 in Fidelity Strategic Dividend on September 3, 2024 and sell it today you would earn a total of 207.00 from holding Fidelity Strategic Dividend or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Capital Income vs. Fidelity Strategic Dividend
Performance |
| Timeline |
| Fidelity Capital Income |
| Fidelity Strategic |
Fidelity Capital and Fidelity Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Capital and Fidelity Strategic
The main advantage of trading using opposite Fidelity Capital and Fidelity Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital position performs unexpectedly, Fidelity Strategic 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 Strategic will offset losses from the drop in Fidelity Strategic's long position.| Fidelity Capital vs. Vanguard High Yield Corporate | Fidelity Capital vs. Vanguard High Yield Porate | Fidelity Capital vs. Blackrock Hi Yld | Fidelity Capital vs. Blackrock High Yield |
| Fidelity Strategic vs. Fidelity Mega Cap | Fidelity Strategic vs. Fidelity Real Estate | Fidelity Strategic vs. Fidelity Capital Income | Fidelity Strategic vs. Fidelity Total Bond |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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