Correlation Between Fidelity Balanced and The Tocqueville
Can any of the company-specific risk be diversified away by investing in both Fidelity Balanced and The Tocqueville 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 Tocqueville 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 Tocqueville Fund, you can compare the effects of market volatilities on Fidelity Balanced and The Tocqueville 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 Tocqueville. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Balanced and The Tocqueville.
Diversification Opportunities for Fidelity Balanced and The Tocqueville
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and The is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Balanced Fund and The Tocqueville Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Tocqueville 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 Tocqueville. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Tocqueville has no effect on the direction of Fidelity Balanced i.e., Fidelity Balanced and The Tocqueville go up and down completely randomly.
Pair Corralation between Fidelity Balanced and The Tocqueville
Assuming the 90 days horizon Fidelity Balanced is expected to generate 1.35 times less return on investment than The Tocqueville. But when comparing it to its historical volatility, Fidelity Balanced Fund is 1.6 times less risky than The Tocqueville. It trades about 0.14 of its potential returns per unit of risk. The Tocqueville Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,602 in The Tocqueville Fund on September 3, 2024 and sell it today you would earn a total of 735.00 from holding The Tocqueville Fund or generate 15.97% 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. The Tocqueville Fund
Performance |
| Timeline |
| Fidelity Balanced |
| The Tocqueville |
Fidelity Balanced and The Tocqueville Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Balanced and The Tocqueville
The main advantage of trading using opposite Fidelity Balanced and The Tocqueville positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Balanced position performs unexpectedly, The Tocqueville 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 Tocqueville will offset losses from the drop in The Tocqueville'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 Tocqueville vs. Vanguard Total Stock | The Tocqueville vs. Vanguard 500 Index | The Tocqueville vs. Vanguard Total Stock | The Tocqueville vs. Vanguard Total Stock |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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