Correlation Between Fidelity Balanced and The Disciplined
Can any of the company-specific risk be diversified away by investing in both Fidelity Balanced and The Disciplined 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 The Disciplined 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 The Disciplined Growth, you can compare the effects of market volatilities on Fidelity Balanced and The Disciplined 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 The Disciplined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Balanced and The Disciplined.
Diversification Opportunities for Fidelity Balanced and The Disciplined
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and The is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Balanced Fund and The Disciplined Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Disciplined Growth 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 The Disciplined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Disciplined Growth has no effect on the direction of Fidelity Balanced i.e., Fidelity Balanced and The Disciplined go up and down completely randomly.
Pair Corralation between Fidelity Balanced and The Disciplined
Assuming the 90 days horizon Fidelity Balanced Fund is expected to generate 0.58 times more return on investment than The Disciplined. However, Fidelity Balanced Fund is 1.73 times less risky than The Disciplined. It trades about -0.06 of its potential returns per unit of risk. The Disciplined Growth is currently generating about -0.26 per unit of risk. If you would invest 3,022 in Fidelity Balanced Fund on December 1, 2024 and sell it today you would lose (25.00) from holding Fidelity Balanced Fund or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Balanced Fund vs. The Disciplined Growth
Performance |
| Timeline |
| Fidelity Balanced |
| The Disciplined Growth |
Fidelity Balanced and The Disciplined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Balanced and The Disciplined
The main advantage of trading using opposite Fidelity Balanced and The Disciplined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Balanced position performs unexpectedly, The Disciplined 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 The Disciplined will offset losses from the drop in The Disciplined'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 |
| The Disciplined vs. Fidelity Advisor Large | The Disciplined vs. 13d Activist Fund | The Disciplined vs. 13d Activist Fund | The Disciplined vs. 13d Activist Fund |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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