Correlation Between Fidelity Managed and Strategic Allocation
Can any of the company-specific risk be diversified away by investing in both Fidelity Managed and Strategic Allocation 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 Managed and Strategic Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Managed Retirement and Strategic Allocation Moderate, you can compare the effects of market volatilities on Fidelity Managed and Strategic Allocation 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 Managed with a short position of Strategic Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Managed and Strategic Allocation.
Diversification Opportunities for Fidelity Managed and Strategic Allocation
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Strategic is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Managed Retirement and Strategic Allocation Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation and Fidelity Managed 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 Managed Retirement are associated (or correlated) with Strategic Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation has no effect on the direction of Fidelity Managed i.e., Fidelity Managed and Strategic Allocation go up and down completely randomly.
Pair Corralation between Fidelity Managed and Strategic Allocation
Assuming the 90 days horizon Fidelity Managed is expected to generate 1.23 times less return on investment than Strategic Allocation. But when comparing it to its historical volatility, Fidelity Managed Retirement is 1.44 times less risky than Strategic Allocation. It trades about 0.08 of its potential returns per unit of risk. Strategic Allocation Moderate is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 570.00 in Strategic Allocation Moderate on September 3, 2024 and sell it today you would earn a total of 120.00 from holding Strategic Allocation Moderate or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Managed Retirement vs. Strategic Allocation Moderate
Performance |
| Timeline |
| Fidelity Managed Ret |
| Strategic Allocation |
Fidelity Managed and Strategic Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Managed and Strategic Allocation
The main advantage of trading using opposite Fidelity Managed and Strategic Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Managed position performs unexpectedly, Strategic Allocation 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 Strategic Allocation will offset losses from the drop in Strategic Allocation's long position.| Fidelity Managed vs. Trowe Price Retirement | Fidelity Managed vs. Trowe Price Retirement | Fidelity Managed vs. Fidelity Freedom 2020 | Fidelity Managed vs. American Funds 2020 |
| Strategic Allocation vs. Jhancock Disciplined Value | Strategic Allocation vs. Qs Large Cap | Strategic Allocation vs. Qs Large Cap | Strategic Allocation vs. Avantis Large 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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