Correlation Between Fidelity Capital and James Alpha
Can any of the company-specific risk be diversified away by investing in both Fidelity Capital and James Alpha 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 James Alpha 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 James Alpha Structured, you can compare the effects of market volatilities on Fidelity Capital and James Alpha 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 James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and James Alpha.
Diversification Opportunities for Fidelity Capital and James Alpha
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and James is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and James Alpha Structured in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Alpha Structured 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 James Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Alpha Structured has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and James Alpha go up and down completely randomly.
Pair Corralation between Fidelity Capital and James Alpha
Assuming the 90 days horizon Fidelity Capital Income is expected to generate 2.34 times more return on investment than James Alpha. However, Fidelity Capital is 2.34 times more volatile than James Alpha Structured. It trades about 0.33 of its potential returns per unit of risk. James Alpha Structured is currently generating about 0.04 per unit of risk. If you would invest 1,017 in Fidelity Capital Income on August 30, 2024 and sell it today you would earn a total of 20.00 from holding Fidelity Capital Income or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fidelity Capital Income vs. James Alpha Structured
Performance |
| Timeline |
| Fidelity Capital Income |
| James Alpha Structured |
Fidelity Capital and James Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Capital and James Alpha
The main advantage of trading using opposite Fidelity Capital and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital position performs unexpectedly, James Alpha 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 James Alpha will offset losses from the drop in James Alpha'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 |
| James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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