Correlation Between Fidelity Convertible and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Fidelity Convertible and Dow Jones 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 Convertible and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Vertible Securities and Dow Jones Industrial, you can compare the effects of market volatilities on Fidelity Convertible and Dow Jones 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 Convertible with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Convertible and Dow Jones.
Diversification Opportunities for Fidelity Convertible and Dow Jones
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Dow is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Vertible Securities and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Fidelity Convertible 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 Vertible Securities are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Fidelity Convertible i.e., Fidelity Convertible and Dow Jones go up and down completely randomly.
Pair Corralation between Fidelity Convertible and Dow Jones
Assuming the 90 days horizon Fidelity Vertible Securities is expected to generate 0.68 times more return on investment than Dow Jones. However, Fidelity Vertible Securities is 1.48 times less risky than Dow Jones. It trades about 0.4 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.19 per unit of risk. If you would invest 3,518 in Fidelity Vertible Securities on August 24, 2024 and sell it today you would earn a total of 207.00 from holding Fidelity Vertible Securities or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fidelity Vertible Securities vs. Dow Jones Industrial
Performance |
| Timeline |
Fidelity Convertible and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Fidelity Vertible Securities
Pair trading matchups for Fidelity Convertible
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Fidelity Convertible and Dow Jones
The main advantage of trading using opposite Fidelity Convertible and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Convertible position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Fidelity Convertible vs. Fidelity Telecom And | Fidelity Convertible vs. Fidelity Europe Fund | Fidelity Convertible vs. Fidelity Canada Fund | Fidelity Convertible vs. Fidelity Pacific Basin |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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