Correlation Between Fidelity Balanced and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Fidelity Balanced and Icon Financial 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 Icon Financial 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 Icon Financial Fund, you can compare the effects of market volatilities on Fidelity Balanced and Icon Financial 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 Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Balanced and Icon Financial.
Diversification Opportunities for Fidelity Balanced and Icon Financial
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Icon is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Balanced Fund and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial 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 Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of Fidelity Balanced i.e., Fidelity Balanced and Icon Financial go up and down completely randomly.
Pair Corralation between Fidelity Balanced and Icon Financial
Assuming the 90 days horizon Fidelity Balanced is expected to generate 3.14 times less return on investment than Icon Financial. But when comparing it to its historical volatility, Fidelity Balanced Fund is 2.25 times less risky than Icon Financial. It trades about 0.14 of its potential returns per unit of risk. Icon Financial Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,108 in Icon Financial Fund on August 28, 2024 and sell it today you would earn a total of 61.00 from holding Icon Financial Fund or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Balanced Fund vs. Icon Financial Fund
Performance |
| Timeline |
| Fidelity Balanced |
| Icon Financial |
Fidelity Balanced and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Balanced and Icon Financial
The main advantage of trading using opposite Fidelity Balanced and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Balanced position performs unexpectedly, Icon Financial 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 Icon Financial will offset losses from the drop in Icon Financial'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 |
| Icon Financial vs. Ab Municipal Bond | Icon Financial vs. Guidepath Managed Futures | Icon Financial vs. Loomis Sayles Inflation | Icon Financial vs. Ab Bond Inflation |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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