Correlation Between Fidelity Balanced and Nuveen Dow
Can any of the company-specific risk be diversified away by investing in both Fidelity Balanced and Nuveen Dow 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 Nuveen Dow 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 Nuveen Dow 30, you can compare the effects of market volatilities on Fidelity Balanced and Nuveen Dow 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 Nuveen Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Balanced and Nuveen Dow.
Diversification Opportunities for Fidelity Balanced and Nuveen Dow
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Nuveen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Balanced Fund and Nuveen Dow 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Dow 30 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 Nuveen Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Dow 30 has no effect on the direction of Fidelity Balanced i.e., Fidelity Balanced and Nuveen Dow go up and down completely randomly.
Pair Corralation between Fidelity Balanced and Nuveen Dow
Assuming the 90 days horizon Fidelity Balanced Fund is expected to generate 0.91 times more return on investment than Nuveen Dow. However, Fidelity Balanced Fund is 1.1 times less risky than Nuveen Dow. It trades about 0.12 of its potential returns per unit of risk. Nuveen Dow 30 is currently generating about 0.02 per unit of risk. If you would invest 2,229 in Fidelity Balanced Fund on September 3, 2024 and sell it today you would earn a total of 840.00 from holding Fidelity Balanced Fund or generate 37.69% 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. Nuveen Dow 30
Performance |
| Timeline |
| Fidelity Balanced |
| Nuveen Dow 30 |
Fidelity Balanced and Nuveen Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Balanced and Nuveen Dow
The main advantage of trading using opposite Fidelity Balanced and Nuveen Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Balanced position performs unexpectedly, Nuveen Dow 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 Nuveen Dow will offset losses from the drop in Nuveen Dow'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 |
| Nuveen Dow vs. Nuveen Symphony Floating | Nuveen Dow vs. Nuveen Symphony Floating | Nuveen Dow vs. Nuveen Symphony Floating | Nuveen Dow vs. Nuveen Symphony Floating |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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