Correlation Between Consumer Staples and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both Consumer Staples and Fidelity Series 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 Consumer Staples and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consumer Staples Portfolio and Fidelity Series Emerging, you can compare the effects of market volatilities on Consumer Staples and Fidelity Series 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 Consumer Staples with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consumer Staples and Fidelity Series.
Diversification Opportunities for Consumer Staples and Fidelity Series
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Consumer and Fidelity is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Consumer Staples Portfolio and Fidelity Series Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Emerging and Consumer Staples 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 Consumer Staples Portfolio are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Emerging has no effect on the direction of Consumer Staples i.e., Consumer Staples and Fidelity Series go up and down completely randomly.
Pair Corralation between Consumer Staples and Fidelity Series
Assuming the 90 days horizon Consumer Staples Portfolio is expected to under-perform the Fidelity Series. In addition to that, Consumer Staples is 1.38 times more volatile than Fidelity Series Emerging. It trades about -0.29 of its total potential returns per unit of risk. Fidelity Series Emerging is currently generating about -0.04 per unit of volatility. If you would invest 892.00 in Fidelity Series Emerging on October 26, 2024 and sell it today you would lose (12.00) from holding Fidelity Series Emerging or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consumer Staples Portfolio vs. Fidelity Series Emerging
Performance |
| Timeline |
| Consumer Staples Por |
| Fidelity Series Emerging |
Consumer Staples and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consumer Staples and Fidelity Series
The main advantage of trading using opposite Consumer Staples and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consumer Staples position performs unexpectedly, Fidelity Series 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 Fidelity Series will offset losses from the drop in Fidelity Series' long position.| Consumer Staples vs. Lord Abbett Convertible | Consumer Staples vs. Advent Claymore Convertible | Consumer Staples vs. Columbia Convertible Securities | Consumer Staples vs. Fidelity Sai Convertible |
| Fidelity Series vs. Fidelity New Markets | Fidelity Series vs. Fidelity Advisor Sustainable | Fidelity Series vs. Fidelity New Markets | Fidelity Series vs. Fidelity Advisor Sustainable |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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