Correlation Between Fidelity Contrafund and Clarkston Fund
Can any of the company-specific risk be diversified away by investing in both Fidelity Contrafund and Clarkston Fund 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 Clarkston Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Contrafund and Clarkston Fund Institutional, you can compare the effects of market volatilities on Fidelity Contrafund and Clarkston Fund 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 Clarkston Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Contrafund and Clarkston Fund.
Diversification Opportunities for Fidelity Contrafund and Clarkston Fund
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Clarkston is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Contrafund and Clarkston Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarkston Fund Insti 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 Contrafund are associated (or correlated) with Clarkston Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarkston Fund Insti has no effect on the direction of Fidelity Contrafund i.e., Fidelity Contrafund and Clarkston Fund go up and down completely randomly.
Pair Corralation between Fidelity Contrafund and Clarkston Fund
Assuming the 90 days horizon Fidelity Contrafund is expected to generate 2.01 times less return on investment than Clarkston Fund. In addition to that, Fidelity Contrafund is 1.66 times more volatile than Clarkston Fund Institutional. It trades about 0.07 of its total potential returns per unit of risk. Clarkston Fund Institutional is currently generating about 0.24 per unit of volatility. If you would invest 1,573 in Clarkston Fund Institutional on August 29, 2024 and sell it today you would earn a total of 55.00 from holding Clarkston Fund Institutional or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Contrafund vs. Clarkston Fund Institutional
Performance |
| Timeline |
| Fidelity Contrafund |
| Clarkston Fund Insti |
Fidelity Contrafund and Clarkston Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Contrafund and Clarkston Fund
The main advantage of trading using opposite Fidelity Contrafund and Clarkston Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Contrafund position performs unexpectedly, Clarkston Fund 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 Clarkston Fund will offset losses from the drop in Clarkston Fund's long position.| Fidelity Contrafund vs. Fidelity Low Priced Stock | Fidelity Contrafund vs. Fidelity Growth Pany | Fidelity Contrafund vs. Fidelity Magellan Fund | Fidelity Contrafund vs. Fidelity Diversified International |
| Clarkston Fund vs. Clarkston Partners Fund | Clarkston Fund vs. Clarkston Founders Fund | Clarkston Fund vs. Columbia Acorn International | Clarkston Fund vs. Clarkston Partners Fund |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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