Correlation Between Fidelity Series and The Arbitrage
Can any of the company-specific risk be diversified away by investing in both Fidelity Series and The Arbitrage 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 Series and The Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Series 1000 and The Arbitrage Fund, you can compare the effects of market volatilities on Fidelity Series and The Arbitrage 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 Series with a short position of The Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and The Arbitrage.
Diversification Opportunities for Fidelity Series and The Arbitrage
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and The is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series 1000 and The Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Arbitrage and Fidelity Series 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 Series 1000 are associated (or correlated) with The Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Arbitrage has no effect on the direction of Fidelity Series i.e., Fidelity Series and The Arbitrage go up and down completely randomly.
Pair Corralation between Fidelity Series and The Arbitrage
Assuming the 90 days horizon Fidelity Series 1000 is expected to generate 3.66 times more return on investment than The Arbitrage. However, Fidelity Series is 3.66 times more volatile than The Arbitrage Fund. It trades about 0.12 of its potential returns per unit of risk. The Arbitrage Fund is currently generating about 0.06 per unit of risk. If you would invest 1,581 in Fidelity Series 1000 on September 3, 2024 and sell it today you would earn a total of 223.00 from holding Fidelity Series 1000 or generate 14.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Series 1000 vs. The Arbitrage Fund
Performance |
| Timeline |
| Fidelity Series 1000 |
| The Arbitrage |
Fidelity Series and The Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Series and The Arbitrage
The main advantage of trading using opposite Fidelity Series and The Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Series position performs unexpectedly, The Arbitrage 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 The Arbitrage will offset losses from the drop in The Arbitrage's long position.| Fidelity Series vs. John Hancock Funds | Fidelity Series vs. T Rowe Price | Fidelity Series vs. T Rowe Price | Fidelity Series vs. Hood River New |
| The Arbitrage vs. The Hartford Growth | The Arbitrage vs. The Hartford Balanced | The Arbitrage vs. The Hartford Balanced | The Arbitrage vs. The Arbitrage Event Driven |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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