Correlation Between Fidelity Disciplined and Fidelity Focused
Can any of the company-specific risk be diversified away by investing in both Fidelity Disciplined and Fidelity Focused 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 Disciplined and Fidelity Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Disciplined Equity and Fidelity Focused Stock, you can compare the effects of market volatilities on Fidelity Disciplined and Fidelity Focused 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 Disciplined with a short position of Fidelity Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Disciplined and Fidelity Focused.
Diversification Opportunities for Fidelity Disciplined and Fidelity Focused
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Disciplined Equity and Fidelity Focused Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Focused Stock and Fidelity Disciplined 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 Disciplined Equity are associated (or correlated) with Fidelity Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Focused Stock has no effect on the direction of Fidelity Disciplined i.e., Fidelity Disciplined and Fidelity Focused go up and down completely randomly.
Pair Corralation between Fidelity Disciplined and Fidelity Focused
Assuming the 90 days horizon Fidelity Disciplined Equity is expected to generate 0.82 times more return on investment than Fidelity Focused. However, Fidelity Disciplined Equity is 1.22 times less risky than Fidelity Focused. It trades about 0.32 of its potential returns per unit of risk. Fidelity Focused Stock is currently generating about 0.23 per unit of risk. If you would invest 7,074 in Fidelity Disciplined Equity on September 1, 2024 and sell it today you would earn a total of 437.00 from holding Fidelity Disciplined Equity or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Disciplined Equity vs. Fidelity Focused Stock
Performance |
| Timeline |
| Fidelity Disciplined |
| Fidelity Focused Stock |
Fidelity Disciplined and Fidelity Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Disciplined and Fidelity Focused
The main advantage of trading using opposite Fidelity Disciplined and Fidelity Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Disciplined position performs unexpectedly, Fidelity Focused 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 Focused will offset losses from the drop in Fidelity Focused's long position.| Fidelity Disciplined vs. Fidelity Stock Selector | Fidelity Disciplined vs. Fidelity Trend Fund | Fidelity Disciplined vs. Ab Flexfee Thematic | Fidelity Disciplined vs. Fidelity Stock Selector |
| Fidelity Focused vs. Fidelity Trend Fund | Fidelity Focused vs. Fidelity Large Cap | Fidelity Focused vs. Fidelity Growth Discovery | Fidelity Focused vs. Fidelity Mega Cap |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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