Correlation Between Fidelity Series and American Funds
Can any of the company-specific risk be diversified away by investing in both Fidelity Series and American 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 Series and American Funds 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 American Funds Developing, you can compare the effects of market volatilities on Fidelity Series and American 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 Series with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and American Funds.
Diversification Opportunities for Fidelity Series and American Funds
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and American is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series 1000 and American Funds Developing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Developing 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Developing has no effect on the direction of Fidelity Series i.e., Fidelity Series and American Funds go up and down completely randomly.
Pair Corralation between Fidelity Series and American Funds
Assuming the 90 days horizon Fidelity Series 1000 is expected to under-perform the American Funds. In addition to that, Fidelity Series is 1.44 times more volatile than American Funds Developing. It trades about -0.21 of its total potential returns per unit of risk. American Funds Developing is currently generating about 0.06 per unit of volatility. If you would invest 1,074 in American Funds Developing on September 13, 2024 and sell it today you would earn a total of 8.00 from holding American Funds Developing or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Series 1000 vs. American Funds Developing
Performance |
| Timeline |
| Fidelity Series 1000 |
| American Funds Developing |
Fidelity Series and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Series and American Funds
The main advantage of trading using opposite Fidelity Series and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Series position performs unexpectedly, American 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 American Funds will offset losses from the drop in American Funds' long position.| Fidelity Series vs. Balanced Fund Investor | Fidelity Series vs. Small Cap Stock | Fidelity Series vs. Issachar Fund Class | Fidelity Series vs. Rbb Fund |
| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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