Correlation Between Fidelity Contrafund and Riverpark Strategic
Can any of the company-specific risk be diversified away by investing in both Fidelity Contrafund and Riverpark Strategic 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 Riverpark Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Contrafund and Riverpark Strategic Income, you can compare the effects of market volatilities on Fidelity Contrafund and Riverpark Strategic 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 Riverpark Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Contrafund and Riverpark Strategic.
Diversification Opportunities for Fidelity Contrafund and Riverpark Strategic
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Riverpark is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Contrafund and Riverpark Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riverpark Strategic 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 Riverpark Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riverpark Strategic has no effect on the direction of Fidelity Contrafund i.e., Fidelity Contrafund and Riverpark Strategic go up and down completely randomly.
Pair Corralation between Fidelity Contrafund and Riverpark Strategic
Assuming the 90 days horizon Fidelity Contrafund is expected to generate 5.79 times more return on investment than Riverpark Strategic. However, Fidelity Contrafund is 5.79 times more volatile than Riverpark Strategic Income. It trades about 0.1 of its potential returns per unit of risk. Riverpark Strategic Income is currently generating about 0.07 per unit of risk. If you would invest 2,111 in Fidelity Contrafund on August 29, 2024 and sell it today you would earn a total of 73.00 from holding Fidelity Contrafund or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Fidelity Contrafund vs. Riverpark Strategic Income
Performance |
| Timeline |
| Fidelity Contrafund |
| Riverpark Strategic |
Fidelity Contrafund and Riverpark Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Contrafund and Riverpark Strategic
The main advantage of trading using opposite Fidelity Contrafund and Riverpark Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Contrafund position performs unexpectedly, Riverpark Strategic 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 Riverpark Strategic will offset losses from the drop in Riverpark Strategic'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 |
| Riverpark Strategic vs. Lord Abbett Small | Riverpark Strategic vs. Queens Road Small | Riverpark Strategic vs. Ultramid Cap Profund Ultramid Cap | Riverpark Strategic vs. Mid Cap Growth Profund |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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