Correlation Between Fidelity Contrafund and Strategic Allocation:
Can any of the company-specific risk be diversified away by investing in both Fidelity Contrafund and Strategic Allocation: 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 Contrafund and Strategic Allocation: into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Contrafund K6 and Strategic Allocation Aggressive, you can compare the effects of market volatilities on Fidelity Contrafund and Strategic Allocation: 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 Contrafund with a short position of Strategic Allocation:. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Contrafund and Strategic Allocation:.
Diversification Opportunities for Fidelity Contrafund and Strategic Allocation:
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Strategic is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Contrafund K6 and Strategic Allocation Aggressiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation: and Fidelity Contrafund 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 Contrafund K6 are associated (or correlated) with Strategic Allocation:. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation: has no effect on the direction of Fidelity Contrafund i.e., Fidelity Contrafund and Strategic Allocation: go up and down completely randomly.
Pair Corralation between Fidelity Contrafund and Strategic Allocation:
Assuming the 90 days horizon Fidelity Contrafund K6 is expected to generate 1.41 times more return on investment than Strategic Allocation:. However, Fidelity Contrafund is 1.41 times more volatile than Strategic Allocation Aggressive. It trades about 0.13 of its potential returns per unit of risk. Strategic Allocation Aggressive is currently generating about 0.07 per unit of risk. If you would invest 1,737 in Fidelity Contrafund K6 on September 3, 2024 and sell it today you would earn a total of 1,420 from holding Fidelity Contrafund K6 or generate 81.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Contrafund K6 vs. Strategic Allocation Aggressiv
Performance |
| Timeline |
| Fidelity Contrafund |
| Strategic Allocation: |
Fidelity Contrafund and Strategic Allocation: Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Contrafund and Strategic Allocation:
The main advantage of trading using opposite Fidelity Contrafund and Strategic Allocation: positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Contrafund position performs unexpectedly, Strategic Allocation: 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 Strategic Allocation: will offset losses from the drop in Strategic Allocation:'s long position.| Fidelity Contrafund vs. American Funds The | Fidelity Contrafund vs. American Funds The | Fidelity Contrafund vs. Growth Fund Of | Fidelity Contrafund vs. Growth Fund Of |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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