Correlation Between Fidelity Contrafund and Lifex Inflation-protec
Can any of the company-specific risk be diversified away by investing in both Fidelity Contrafund and Lifex Inflation-protec 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 Lifex Inflation-protec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Contrafund and Lifex Inflation Protected Income, you can compare the effects of market volatilities on Fidelity Contrafund and Lifex Inflation-protec 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 Lifex Inflation-protec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Contrafund and Lifex Inflation-protec.
Diversification Opportunities for Fidelity Contrafund and Lifex Inflation-protec
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Lifex is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Contrafund and Lifex Inflation Protected Inco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Inflation-protec 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 Lifex Inflation-protec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Inflation-protec has no effect on the direction of Fidelity Contrafund i.e., Fidelity Contrafund and Lifex Inflation-protec go up and down completely randomly.
Pair Corralation between Fidelity Contrafund and Lifex Inflation-protec
Assuming the 90 days horizon Fidelity Contrafund is expected to generate 2.1 times more return on investment than Lifex Inflation-protec. However, Fidelity Contrafund is 2.1 times more volatile than Lifex Inflation Protected Income. It trades about 0.13 of its potential returns per unit of risk. Lifex Inflation Protected Income is currently generating about 0.06 per unit of risk. If you would invest 1,226 in Fidelity Contrafund on August 30, 2024 and sell it today you would earn a total of 958.00 from holding Fidelity Contrafund or generate 78.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 44.24% |
| Values | Daily Returns |
Fidelity Contrafund vs. Lifex Inflation Protected Inco
Performance |
| Timeline |
| Fidelity Contrafund |
| Lifex Inflation-protec |
Fidelity Contrafund and Lifex Inflation-protec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Contrafund and Lifex Inflation-protec
The main advantage of trading using opposite Fidelity Contrafund and Lifex Inflation-protec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Contrafund position performs unexpectedly, Lifex Inflation-protec 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 Lifex Inflation-protec will offset losses from the drop in Lifex Inflation-protec'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 |
| Lifex Inflation-protec vs. Dreyfusstandish Global Fixed | Lifex Inflation-protec vs. Ab Global Bond | Lifex Inflation-protec vs. Maryland Tax Free Bond | Lifex Inflation-protec vs. Artisan High Income |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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