Correlation Between Fidelity Real and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Fidelity Real and Federated Strategic 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 Federated Strategic 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 Federated Strategic Income, you can compare the effects of market volatilities on Fidelity Real and Federated Strategic 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 Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Real and Federated Strategic.
Diversification Opportunities for Fidelity Real and Federated Strategic
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Federated is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Real Estate and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic 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 Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Fidelity Real i.e., Fidelity Real and Federated Strategic go up and down completely randomly.
Pair Corralation between Fidelity Real and Federated Strategic
Assuming the 90 days horizon Fidelity Real Estate is expected to generate 1.16 times more return on investment than Federated Strategic. However, Fidelity Real is 1.16 times more volatile than Federated Strategic Income. It trades about 0.14 of its potential returns per unit of risk. Federated Strategic Income is currently generating about 0.12 per unit of risk. If you would invest 1,102 in Fidelity Real Estate on September 12, 2024 and sell it today you would earn a total of 124.00 from holding Fidelity Real Estate or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Real Estate vs. Federated Strategic Income
Performance |
| Timeline |
| Fidelity Real Estate |
| Federated Strategic |
Fidelity Real and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Real and Federated Strategic
The main advantage of trading using opposite Fidelity Real and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Real position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic'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 |
| Federated Strategic vs. Forum Real Estate | Federated Strategic vs. Vy Clarion Real | Federated Strategic vs. Fidelity Real Estate | Federated Strategic vs. Franklin 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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