Correlation Between Fidelity and Kentucky First
Can any of the company-specific risk be diversified away by investing in both Fidelity and Kentucky First 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 and Kentucky First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity DD Bancorp and Kentucky First Federal, you can compare the effects of market volatilities on Fidelity and Kentucky First 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 with a short position of Kentucky First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity and Kentucky First.
Diversification Opportunities for Fidelity and Kentucky First
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Kentucky is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity DD Bancorp and Kentucky First Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentucky First Federal and Fidelity 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 DD Bancorp are associated (or correlated) with Kentucky First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentucky First Federal has no effect on the direction of Fidelity i.e., Fidelity and Kentucky First go up and down completely randomly.
Pair Corralation between Fidelity and Kentucky First
Given the investment horizon of 90 days Fidelity DD Bancorp is expected to generate 0.81 times more return on investment than Kentucky First. However, Fidelity DD Bancorp is 1.24 times less risky than Kentucky First. It trades about 0.04 of its potential returns per unit of risk. Kentucky First Federal is currently generating about -0.06 per unit of risk. If you would invest 4,457 in Fidelity DD Bancorp on August 29, 2024 and sell it today you would earn a total of 908.00 from holding Fidelity DD Bancorp or generate 20.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
Fidelity DD Bancorp vs. Kentucky First Federal
Performance |
| Timeline |
| Fidelity DD Bancorp |
| Kentucky First Federal |
Fidelity and Kentucky First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity and Kentucky First
The main advantage of trading using opposite Fidelity and Kentucky First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity position performs unexpectedly, Kentucky First 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 Kentucky First will offset losses from the drop in Kentucky First's long position.| Fidelity vs. Chemung Financial Corp | Fidelity vs. Oak Valley Bancorp | Fidelity vs. First Community | Fidelity vs. National Bankshares |
| Kentucky First vs. Home Federal Bancorp | Kentucky First vs. Lake Shore Bancorp | Kentucky First vs. Commerzbank AG | Kentucky First vs. Investar Holding Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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