Correlation Between Fidelity Government and Fidelity Stock
Can any of the company-specific risk be diversified away by investing in both Fidelity Government and Fidelity Stock 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 Government and Fidelity Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Government Income and Fidelity Stock Selector, you can compare the effects of market volatilities on Fidelity Government and Fidelity Stock 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 Government with a short position of Fidelity Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Government and Fidelity Stock.
Diversification Opportunities for Fidelity Government and Fidelity Stock
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fidelity and Fidelity is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Government Income and Fidelity Stock Selector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Stock Selector and Fidelity Government 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 Government Income are associated (or correlated) with Fidelity Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Stock Selector has no effect on the direction of Fidelity Government i.e., Fidelity Government and Fidelity Stock go up and down completely randomly.
Pair Corralation between Fidelity Government and Fidelity Stock
Assuming the 90 days horizon Fidelity Government is expected to generate 4.17 times less return on investment than Fidelity Stock. But when comparing it to its historical volatility, Fidelity Government Income is 2.39 times less risky than Fidelity Stock. It trades about 0.08 of its potential returns per unit of risk. Fidelity Stock Selector is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,465 in Fidelity Stock Selector on August 31, 2024 and sell it today you would earn a total of 1,137 from holding Fidelity Stock Selector or generate 15.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Government Income vs. Fidelity Stock Selector
Performance |
| Timeline |
| Fidelity Government |
| Fidelity Stock Selector |
Fidelity Government and Fidelity Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Government and Fidelity Stock
The main advantage of trading using opposite Fidelity Government and Fidelity Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Government position performs unexpectedly, Fidelity Stock 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 Stock will offset losses from the drop in Fidelity Stock's long position.| Fidelity Government vs. Vanguard Gnma Fund | Fidelity Government vs. Us Government Securities | Fidelity Government vs. American Funds Government | Fidelity Government vs. Fidelity Sai Treasury |
| Fidelity Stock vs. Europacific Growth Fund | Fidelity Stock vs. Washington Mutual Investors | Fidelity Stock vs. Capital World Growth | Fidelity Stock vs. HUMANA INC |
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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