Correlation Between Fidelity Trafund and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Fidelity Trafund and Needham Aggressive 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 Trafund and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Trafund Class and Needham Aggressive Growth, you can compare the effects of market volatilities on Fidelity Trafund and Needham Aggressive 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 Trafund with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Trafund and Needham Aggressive.
Diversification Opportunities for Fidelity Trafund and Needham Aggressive
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Needham is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Trafund Class and Needham Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Aggressive Growth and Fidelity Trafund 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 Trafund Class are associated (or correlated) with Needham Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Aggressive Growth has no effect on the direction of Fidelity Trafund i.e., Fidelity Trafund and Needham Aggressive go up and down completely randomly.
Pair Corralation between Fidelity Trafund and Needham Aggressive
Assuming the 90 days horizon Fidelity Trafund Class is expected to generate 0.72 times more return on investment than Needham Aggressive. However, Fidelity Trafund Class is 1.4 times less risky than Needham Aggressive. It trades about 0.13 of its potential returns per unit of risk. Needham Aggressive Growth is currently generating about 0.09 per unit of risk. If you would invest 1,199 in Fidelity Trafund Class on September 14, 2024 and sell it today you would earn a total of 985.00 from holding Fidelity Trafund Class or generate 82.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Trafund Class vs. Needham Aggressive Growth
Performance |
| Timeline |
| Fidelity Trafund Class |
| Needham Aggressive Growth |
Fidelity Trafund and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Trafund and Needham Aggressive
The main advantage of trading using opposite Fidelity Trafund and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Trafund position performs unexpectedly, Needham Aggressive 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 Needham Aggressive will offset losses from the drop in Needham Aggressive's long position.| Fidelity Trafund vs. Fidelity Freedom 2015 | Fidelity Trafund vs. Fidelity Puritan Fund | Fidelity Trafund vs. Fidelity Puritan Fund | Fidelity Trafund vs. Fidelity Pennsylvania Municipal |
| Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Needham Small Cap | Needham Aggressive vs. Ultramid Cap Profund Ultramid Cap | Needham Aggressive vs. Fidelity Advisor Semiconductors |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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