Correlation Between Fidelity Balanced and Six Circles
Can any of the company-specific risk be diversified away by investing in both Fidelity Balanced and Six Circles 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 Six Circles 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 Six Circles Unconstrained, you can compare the effects of market volatilities on Fidelity Balanced and Six Circles 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 Six Circles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Balanced and Six Circles.
Diversification Opportunities for Fidelity Balanced and Six Circles
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between FIDELITY and Six is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Balanced Fund and Six Circles Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Circles Unconstrained 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 Six Circles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Circles Unconstrained has no effect on the direction of Fidelity Balanced i.e., Fidelity Balanced and Six Circles go up and down completely randomly.
Pair Corralation between Fidelity Balanced and Six Circles
Assuming the 90 days horizon Fidelity Balanced is expected to generate 1.75 times less return on investment than Six Circles. But when comparing it to its historical volatility, Fidelity Balanced Fund is 1.53 times less risky than Six Circles. It trades about 0.05 of its potential returns per unit of risk. Six Circles Unconstrained is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,227 in Six Circles Unconstrained on January 13, 2025 and sell it today you would earn a total of 340.00 from holding Six Circles Unconstrained or generate 27.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Balanced Fund vs. Six Circles Unconstrained
Performance |
| Timeline |
| Fidelity Balanced |
| Six Circles Unconstrained |
Fidelity Balanced and Six Circles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Balanced and Six Circles
The main advantage of trading using opposite Fidelity Balanced and Six Circles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Balanced position performs unexpectedly, Six Circles 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 Six Circles will offset losses from the drop in Six Circles' 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 |
| Six Circles vs. Six Circles Ultra | Six Circles vs. Six Circles Global | Six Circles vs. Six Circles International | Six Circles vs. Six Circles Managed |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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