Correlation Between Fidelity Contrafund and Sprucegrove International
Can any of the company-specific risk be diversified away by investing in both Fidelity Contrafund and Sprucegrove International 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 Sprucegrove International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Contrafund and Sprucegrove International Equity, you can compare the effects of market volatilities on Fidelity Contrafund and Sprucegrove International 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 Sprucegrove International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Contrafund and Sprucegrove International.
Diversification Opportunities for Fidelity Contrafund and Sprucegrove International
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Sprucegrove is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Contrafund and Sprucegrove International Equi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprucegrove International 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 Sprucegrove International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprucegrove International has no effect on the direction of Fidelity Contrafund i.e., Fidelity Contrafund and Sprucegrove International go up and down completely randomly.
Pair Corralation between Fidelity Contrafund and Sprucegrove International
Assuming the 90 days horizon Fidelity Contrafund is expected to generate 1.12 times more return on investment than Sprucegrove International. However, Fidelity Contrafund is 1.12 times more volatile than Sprucegrove International Equity. It trades about 0.09 of its potential returns per unit of risk. Sprucegrove International Equity is currently generating about -0.09 per unit of risk. If you would invest 1,964 in Fidelity Contrafund on October 25, 2024 and sell it today you would earn a total of 222.00 from holding Fidelity Contrafund or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Contrafund vs. Sprucegrove International Equi
Performance |
| Timeline |
| Fidelity Contrafund |
| Sprucegrove International |
Fidelity Contrafund and Sprucegrove International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Contrafund and Sprucegrove International
The main advantage of trading using opposite Fidelity Contrafund and Sprucegrove International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Contrafund position performs unexpectedly, Sprucegrove International 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 Sprucegrove International will offset losses from the drop in Sprucegrove International'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 |
| Sprucegrove International vs. Enhanced Large Pany | Sprucegrove International vs. Dodge Cox Stock | Sprucegrove International vs. Qs Large Cap | Sprucegrove International vs. Rational Strategic Allocation |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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