Correlation Between American Funds and Fidelity Strategic
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Fidelity Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds The and Fidelity Strategic Dividend, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Fidelity Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Fidelity Strategic.
Diversification Opportunities for American Funds and Fidelity Strategic
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Fidelity Strategic Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Strategic and American Funds 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 American Funds The 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 American Funds i.e., American Funds and Fidelity Strategic go up and down completely randomly.
Pair Corralation between American Funds and Fidelity Strategic
Assuming the 90 days horizon American Funds is expected to generate 1.08 times less return on investment than Fidelity Strategic. But when comparing it to its historical volatility, American Funds The is 1.14 times less risky than Fidelity Strategic. It trades about 0.09 of its potential returns per unit of risk. Fidelity Strategic Dividend is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,494 in Fidelity Strategic Dividend on August 31, 2024 and sell it today you would earn a total of 342.00 from holding Fidelity Strategic Dividend or generate 22.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds The vs. Fidelity Strategic Dividend
Performance |
| Timeline |
| American Funds |
| Fidelity Strategic |
American Funds and Fidelity Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Fidelity Strategic
The main advantage of trading using opposite American Funds and Fidelity Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Federated Ultrashort Bond | American Funds vs. California Bond Fund | American Funds vs. Dreyfusstandish Global Fixed | American Funds vs. Rationalpier 88 Convertible |
| Fidelity Strategic vs. American Funds The | Fidelity Strategic vs. Income Fund Of | Fidelity Strategic vs. Income Fund Of | Fidelity Strategic vs. Income Fund Of |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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