Correlation Between Frost Kempner and Fidelity Investment
Can any of the company-specific risk be diversified away by investing in both Frost Kempner and Fidelity Investment 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 Frost Kempner and Fidelity Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frost Kempner Treasury and Fidelity Investment Grade, you can compare the effects of market volatilities on Frost Kempner and Fidelity Investment 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 Frost Kempner with a short position of Fidelity Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frost Kempner and Fidelity Investment.
Diversification Opportunities for Frost Kempner and Fidelity Investment
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Frost and Fidelity is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Frost Kempner Treasury and Fidelity Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Investment Grade and Frost Kempner 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 Frost Kempner Treasury are associated (or correlated) with Fidelity Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Investment Grade has no effect on the direction of Frost Kempner i.e., Frost Kempner and Fidelity Investment go up and down completely randomly.
Pair Corralation between Frost Kempner and Fidelity Investment
Assuming the 90 days horizon Frost Kempner is expected to generate 1.18 times less return on investment than Fidelity Investment. But when comparing it to its historical volatility, Frost Kempner Treasury is 3.22 times less risky than Fidelity Investment. It trades about 0.29 of its potential returns per unit of risk. Fidelity Investment Grade is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 718.00 in Fidelity Investment Grade on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Fidelity Investment Grade or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frost Kempner Treasury vs. Fidelity Investment Grade
Performance |
| Timeline |
| Frost Kempner Treasury |
| Fidelity Investment Grade |
Frost Kempner and Fidelity Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frost Kempner and Fidelity Investment
The main advantage of trading using opposite Frost Kempner and Fidelity Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frost Kempner position performs unexpectedly, Fidelity Investment 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 Fidelity Investment will offset losses from the drop in Fidelity Investment's long position.| Frost Kempner vs. Allianzgi Health Sciences | Frost Kempner vs. Tekla Healthcare Opportunities | Frost Kempner vs. Vanguard Health Care | Frost Kempner vs. Health Biotchnology Portfolio |
| Fidelity Investment vs. SCOR PK | Fidelity Investment vs. Morningstar Unconstrained Allocation | Fidelity Investment vs. Via Renewables | Fidelity Investment vs. Bondbloxx ETF Trust |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |