Correlation Between Fidelity Series and Moderate Strategy
Can any of the company-specific risk be diversified away by investing in both Fidelity Series and Moderate Strategy 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 Series and Moderate Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Series Government and Moderate Strategy Fund, you can compare the effects of market volatilities on Fidelity Series and Moderate Strategy 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 Series with a short position of Moderate Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and Moderate Strategy.
Diversification Opportunities for Fidelity Series and Moderate Strategy
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Moderate is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series Government and Moderate Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderate Strategy and Fidelity Series 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 Series Government are associated (or correlated) with Moderate Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderate Strategy has no effect on the direction of Fidelity Series i.e., Fidelity Series and Moderate Strategy go up and down completely randomly.
Pair Corralation between Fidelity Series and Moderate Strategy
Assuming the 90 days horizon Fidelity Series is expected to generate 4.09 times less return on investment than Moderate Strategy. But when comparing it to its historical volatility, Fidelity Series Government is 1.01 times less risky than Moderate Strategy. It trades about 0.08 of its potential returns per unit of risk. Moderate Strategy Fund is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 958.00 in Moderate Strategy Fund on September 3, 2024 and sell it today you would earn a total of 22.00 from holding Moderate Strategy Fund or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Series Government vs. Moderate Strategy Fund
Performance |
| Timeline |
| Fidelity Series Gove |
| Moderate Strategy |
Fidelity Series and Moderate Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Series and Moderate Strategy
The main advantage of trading using opposite Fidelity Series and Moderate Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Series position performs unexpectedly, Moderate Strategy 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 Moderate Strategy will offset losses from the drop in Moderate Strategy's long position.| Fidelity Series vs. Vanguard Intermediate Term Government | Fidelity Series vs. Us Government Securities | Fidelity Series vs. Us Government Securities | Fidelity Series vs. Us Government Securities |
| Moderate Strategy vs. Virtus Seix Government | Moderate Strategy vs. Us Government Securities | Moderate Strategy vs. Ab Government Exchange | Moderate Strategy vs. Fidelity Series Government |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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