Correlation Between Fidelity Balanced and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Fidelity Balanced and Aberdeen Global 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 Balanced and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Balanced Fund and Aberdeen Global Dynamic, you can compare the effects of market volatilities on Fidelity Balanced and Aberdeen Global 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 Balanced with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Balanced and Aberdeen Global.
Diversification Opportunities for Fidelity Balanced and Aberdeen Global
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Aberdeen is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Balanced Fund and Aberdeen Global Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global Dynamic and Fidelity Balanced 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 Balanced Fund are associated (or correlated) with Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global Dynamic has no effect on the direction of Fidelity Balanced i.e., Fidelity Balanced and Aberdeen Global go up and down completely randomly.
Pair Corralation between Fidelity Balanced and Aberdeen Global
Assuming the 90 days horizon Fidelity Balanced Fund is expected to generate 0.91 times more return on investment than Aberdeen Global. However, Fidelity Balanced Fund is 1.1 times less risky than Aberdeen Global. It trades about 0.1 of its potential returns per unit of risk. Aberdeen Global Dynamic is currently generating about -0.12 per unit of risk. If you would invest 2,982 in Fidelity Balanced Fund on August 25, 2024 and sell it today you would earn a total of 37.00 from holding Fidelity Balanced Fund or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Balanced Fund vs. Aberdeen Global Dynamic
Performance |
| Timeline |
| Fidelity Balanced |
| Aberdeen Global Dynamic |
Fidelity Balanced and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Balanced and Aberdeen Global
The main advantage of trading using opposite Fidelity Balanced and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Balanced position performs unexpectedly, Aberdeen Global 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 Aberdeen Global will offset losses from the drop in Aberdeen Global's long position.| Fidelity Balanced vs. Fidelity Puritan Fund | Fidelity Balanced vs. Fidelity Low Priced Stock | Fidelity Balanced vs. Fidelity International Discovery | Fidelity Balanced vs. Fidelity Contrafund |
| Aberdeen Global vs. MFS Investment Grade | Aberdeen Global vs. Eaton Vance National | Aberdeen Global vs. Blackrock Muniyield Quality | Aberdeen Global vs. DTF Tax Free |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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