Correlation Between Fidelity Managed and Pro-blend(r) Moderate
Can any of the company-specific risk be diversified away by investing in both Fidelity Managed and Pro-blend(r) Moderate 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 Pro-blend(r) Moderate 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 Pro Blend Moderate Term, you can compare the effects of market volatilities on Fidelity Managed and Pro-blend(r) Moderate 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 Pro-blend(r) Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Managed and Pro-blend(r) Moderate.
Diversification Opportunities for Fidelity Managed and Pro-blend(r) Moderate
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Pro-blend(r) is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Managed Retirement and Pro Blend Moderate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro-blend(r) Moderate 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 Pro-blend(r) Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro-blend(r) Moderate has no effect on the direction of Fidelity Managed i.e., Fidelity Managed and Pro-blend(r) Moderate go up and down completely randomly.
Pair Corralation between Fidelity Managed and Pro-blend(r) Moderate
Assuming the 90 days horizon Fidelity Managed is expected to generate 1.46 times less return on investment than Pro-blend(r) Moderate. But when comparing it to its historical volatility, Fidelity Managed Retirement is 1.09 times less risky than Pro-blend(r) Moderate. It trades about 0.06 of its potential returns per unit of risk. Pro Blend Moderate Term is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,480 in Pro Blend Moderate Term on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Pro Blend Moderate Term or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Managed Retirement vs. Pro Blend Moderate Term
Performance |
| Timeline |
| Fidelity Managed Ret |
| Pro-blend(r) Moderate |
Fidelity Managed and Pro-blend(r) Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Managed and Pro-blend(r) Moderate
The main advantage of trading using opposite Fidelity Managed and Pro-blend(r) Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Managed position performs unexpectedly, Pro-blend(r) Moderate 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 Pro-blend(r) Moderate will offset losses from the drop in Pro-blend(r) Moderate's long position.| Fidelity Managed vs. Fidelity Freedom Index | Fidelity Managed vs. Fidelity Freedom Index | Fidelity Managed vs. Fidelity Freedom Index | Fidelity Managed vs. ABIVAX Socit Anonyme |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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