Correlation Between Fidelity Contrafund and T Rowe
Can any of the company-specific risk be diversified away by investing in both Fidelity Contrafund and T Rowe 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 Contrafund and T Rowe 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 T Rowe Price, you can compare the effects of market volatilities on Fidelity Contrafund and T Rowe 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 Contrafund with a short position of T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Contrafund and T Rowe.
Diversification Opportunities for Fidelity Contrafund and T Rowe
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FIDELITY and TQAAX is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Trafund Class and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price and Fidelity Contrafund 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 T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Fidelity Contrafund i.e., Fidelity Contrafund and T Rowe go up and down completely randomly.
Pair Corralation between Fidelity Contrafund and T Rowe
Assuming the 90 days horizon Fidelity Contrafund is expected to generate 1.0 times less return on investment than T Rowe. But when comparing it to its historical volatility, Fidelity Trafund Class is 1.12 times less risky than T Rowe. It trades about 0.09 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,310 in T Rowe Price on September 3, 2024 and sell it today you would earn a total of 663.00 from holding T Rowe Price or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Trafund Class vs. T Rowe Price
Performance |
| Timeline |
| Fidelity Trafund Class |
| T Rowe Price |
Fidelity Contrafund and T Rowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Contrafund and T Rowe
The main advantage of trading using opposite Fidelity Contrafund and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Contrafund position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.| Fidelity Contrafund vs. Boston Partners Small | Fidelity Contrafund vs. Heartland Value Plus | Fidelity Contrafund vs. Ultrasmall Cap Profund Ultrasmall Cap | Fidelity Contrafund vs. Columbia Small Cap |
| T Rowe vs. T Rowe Price | T Rowe vs. T Rowe Price | T Rowe vs. Fidelity Small Cap | T Rowe vs. Virtus Kar Small Cap |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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