Correlation Between Fidelity Low and American Beacon
Can any of the company-specific risk be diversified away by investing in both Fidelity Low and American Beacon 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 Low and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Low Priced Stock and American Beacon Shapiro, you can compare the effects of market volatilities on Fidelity Low and American Beacon 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 Low with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Low and American Beacon.
Diversification Opportunities for Fidelity Low and American Beacon
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and American is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Low Priced Stock and American Beacon Shapiro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Shapiro and Fidelity Low 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 Low Priced Stock are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Shapiro has no effect on the direction of Fidelity Low i.e., Fidelity Low and American Beacon go up and down completely randomly.
Pair Corralation between Fidelity Low and American Beacon
Assuming the 90 days horizon Fidelity Low Priced Stock is expected to generate 0.67 times more return on investment than American Beacon. However, Fidelity Low Priced Stock is 1.48 times less risky than American Beacon. It trades about 0.06 of its potential returns per unit of risk. American Beacon Shapiro is currently generating about 0.03 per unit of risk. If you would invest 3,443 in Fidelity Low Priced Stock on September 13, 2024 and sell it today you would earn a total of 808.00 from holding Fidelity Low Priced Stock or generate 23.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fidelity Low Priced Stock vs. American Beacon Shapiro
Performance |
| Timeline |
| Fidelity Low Priced |
| American Beacon Shapiro |
Fidelity Low and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Low and American Beacon
The main advantage of trading using opposite Fidelity Low and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Low position performs unexpectedly, American Beacon 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 Beacon will offset losses from the drop in American Beacon's long position.| Fidelity Low vs. Rbb Fund | Fidelity Low vs. Arrow Managed Futures | Fidelity Low vs. Ab Value Fund | Fidelity Low vs. Volumetric Fund Volumetric |
| American Beacon vs. American Beacon International | American Beacon vs. American Beacon Large | American Beacon vs. Fidelity Low Priced Stock | American Beacon vs. Europacific Growth 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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