Correlation Between Fidelity Balanced and Empiric 2500
Can any of the company-specific risk be diversified away by investing in both Fidelity Balanced and Empiric 2500 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 Empiric 2500 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 Empiric 2500 Fund, you can compare the effects of market volatilities on Fidelity Balanced and Empiric 2500 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 Empiric 2500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Balanced and Empiric 2500.
Diversification Opportunities for Fidelity Balanced and Empiric 2500
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Empiric is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Balanced Fund and Empiric 2500 Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empiric 2500 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 Empiric 2500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empiric 2500 has no effect on the direction of Fidelity Balanced i.e., Fidelity Balanced and Empiric 2500 go up and down completely randomly.
Pair Corralation between Fidelity Balanced and Empiric 2500
Assuming the 90 days horizon Fidelity Balanced is expected to generate 1.29 times less return on investment than Empiric 2500. But when comparing it to its historical volatility, Fidelity Balanced Fund is 1.66 times less risky than Empiric 2500. It trades about 0.12 of its potential returns per unit of risk. Empiric 2500 Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,094 in Empiric 2500 Fund on September 3, 2024 and sell it today you would earn a total of 915.00 from holding Empiric 2500 Fund or generate 15.01% 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. Empiric 2500 Fund
Performance |
| Timeline |
| Fidelity Balanced |
| Empiric 2500 |
Fidelity Balanced and Empiric 2500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Balanced and Empiric 2500
The main advantage of trading using opposite Fidelity Balanced and Empiric 2500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Balanced position performs unexpectedly, Empiric 2500 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 Empiric 2500 will offset losses from the drop in Empiric 2500'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 |
| Empiric 2500 vs. Black Oak Emerging | Empiric 2500 vs. Rbc Emerging Markets | Empiric 2500 vs. Templeton Emerging Markets | Empiric 2500 vs. Nasdaq 100 2x Strategy |
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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