Correlation Between Fidelity Asset and Pacific Funds
Can any of the company-specific risk be diversified away by investing in both Fidelity Asset and Pacific Funds 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 Asset and Pacific Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Asset Manager and Pacific Funds Portfolio, you can compare the effects of market volatilities on Fidelity Asset and Pacific Funds 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 Asset with a short position of Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Asset and Pacific Funds.
Diversification Opportunities for Fidelity Asset and Pacific Funds
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Pacific is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Asset Manager and Pacific Funds Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Portfolio and Fidelity Asset 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 Asset Manager are associated (or correlated) with Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Portfolio has no effect on the direction of Fidelity Asset i.e., Fidelity Asset and Pacific Funds go up and down completely randomly.
Pair Corralation between Fidelity Asset and Pacific Funds
Assuming the 90 days horizon Fidelity Asset Manager is expected to under-perform the Pacific Funds. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Asset Manager is 1.12 times less risky than Pacific Funds. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Pacific Funds Portfolio is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,050 in Pacific Funds Portfolio on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Pacific Funds Portfolio or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Asset Manager vs. Pacific Funds Portfolio
Performance |
| Timeline |
| Fidelity Asset Manager |
| Pacific Funds Portfolio |
Fidelity Asset and Pacific Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Asset and Pacific Funds
The main advantage of trading using opposite Fidelity Asset and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Asset position performs unexpectedly, Pacific Funds 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 Pacific Funds will offset losses from the drop in Pacific Funds' long position.| Fidelity Asset vs. Eventide Healthcare Life | Fidelity Asset vs. Alger Health Sciences | Fidelity Asset vs. Baillie Gifford Health | Fidelity Asset vs. Prudential Health Sciences |
| Pacific Funds vs. Wasatch Global Opportunities | Pacific Funds vs. Barings Global Floating | Pacific Funds vs. Blue Current Global | Pacific Funds vs. Us Global Investors |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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