Correlation Between Fidelity Capital and Managed Account
Can any of the company-specific risk be diversified away by investing in both Fidelity Capital and Managed Account 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 Managed Account 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 Managed Account Series, you can compare the effects of market volatilities on Fidelity Capital and Managed Account 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 Managed Account. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and Managed Account.
Diversification Opportunities for Fidelity Capital and Managed Account
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Managed is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and Managed Account Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Managed Account Series 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 Managed Account. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Managed Account Series has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and Managed Account go up and down completely randomly.
Pair Corralation between Fidelity Capital and Managed Account
Assuming the 90 days horizon Fidelity Capital Income is expected to generate 2.29 times more return on investment than Managed Account. However, Fidelity Capital is 2.29 times more volatile than Managed Account Series. It trades about 0.08 of its potential returns per unit of risk. Managed Account Series is currently generating about 0.06 per unit of risk. If you would invest 1,024 in Fidelity Capital Income on November 4, 2024 and sell it today you would earn a total of 7.00 from holding Fidelity Capital Income or generate 0.68% 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. Managed Account Series
Performance |
| Timeline |
| Fidelity Capital Income |
| Managed Account Series |
Fidelity Capital and Managed Account Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Capital and Managed Account
The main advantage of trading using opposite Fidelity Capital and Managed Account positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital position performs unexpectedly, Managed Account 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 Managed Account will offset losses from the drop in Managed Account'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 |
| Managed Account vs. Putnam Global Technology | Managed Account vs. Science Technology Fund | Managed Account vs. Fidelity Advisor Technology | Managed Account vs. Pgim Jennison Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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