Correlation Between Fidelity Real and American Beacon
Can any of the company-specific risk be diversified away by investing in both Fidelity Real and American Beacon 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 Real and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Real Estate and American Beacon Ark, you can compare the effects of market volatilities on Fidelity Real and American Beacon 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 Real with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Real and American Beacon.
Diversification Opportunities for Fidelity Real and American Beacon
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidelity and American is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Real Estate and American Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Ark and Fidelity Real 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 Real Estate are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Ark has no effect on the direction of Fidelity Real i.e., Fidelity Real and American Beacon go up and down completely randomly.
Pair Corralation between Fidelity Real and American Beacon
Assuming the 90 days horizon Fidelity Real is expected to generate 2.25 times less return on investment than American Beacon. But when comparing it to its historical volatility, Fidelity Real Estate is 5.9 times less risky than American Beacon. It trades about 0.1 of its potential returns per unit of risk. American Beacon Ark is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,238 in American Beacon Ark on September 12, 2024 and sell it today you would earn a total of 313.00 from holding American Beacon Ark or generate 25.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Real Estate vs. American Beacon Ark
Performance |
| Timeline |
| Fidelity Real Estate |
| American Beacon Ark |
Fidelity Real and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Real and American Beacon
The main advantage of trading using opposite Fidelity Real and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Real position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Fidelity Real vs. Strategic Allocation Servative | Fidelity Real vs. Strategic Allocation Aggressive | Fidelity Real vs. Value Fund Investor | Fidelity Real vs. International Growth Fund |
| American Beacon vs. Dunham Real Estate | American Beacon vs. Fidelity Real Estate | American Beacon vs. Goldman Sachs Real | American Beacon vs. Jhancock Real Estate |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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