Correlation Between Fidelity New and Aamhimco Short
Can any of the company-specific risk be diversified away by investing in both Fidelity New and Aamhimco Short 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 New and Aamhimco Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity New Markets and Aamhimco Short Duration, you can compare the effects of market volatilities on Fidelity New and Aamhimco Short 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 New with a short position of Aamhimco Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Aamhimco Short.
Diversification Opportunities for Fidelity New and Aamhimco Short
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Aamhimco is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Markets and Aamhimco Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aamhimco Short Duration and Fidelity New 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 New Markets are associated (or correlated) with Aamhimco Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aamhimco Short Duration has no effect on the direction of Fidelity New i.e., Fidelity New and Aamhimco Short go up and down completely randomly.
Pair Corralation between Fidelity New and Aamhimco Short
Assuming the 90 days horizon Fidelity New Markets is expected to generate 4.39 times more return on investment than Aamhimco Short. However, Fidelity New is 4.39 times more volatile than Aamhimco Short Duration. It trades about 0.29 of its potential returns per unit of risk. Aamhimco Short Duration is currently generating about 0.31 per unit of risk. If you would invest 1,275 in Fidelity New Markets on November 29, 2024 and sell it today you would earn a total of 26.00 from holding Fidelity New Markets or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity New Markets vs. Aamhimco Short Duration
Performance |
| Timeline |
| Fidelity New Markets |
| Aamhimco Short Duration |
Fidelity New and Aamhimco Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity New and Aamhimco Short
The main advantage of trading using opposite Fidelity New and Aamhimco Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New position performs unexpectedly, Aamhimco Short 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 Aamhimco Short will offset losses from the drop in Aamhimco Short's long position.| Fidelity New vs. Delaware Limited Term Diversified | Fidelity New vs. Tax Free Conservative Income | Fidelity New vs. Blackrock Conservative Prprdptfinstttnl | Fidelity New vs. Calvert Conservative Allocation |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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