Correlation Between Fidelity Stock and Touchstone Large
Can any of the company-specific risk be diversified away by investing in both Fidelity Stock and Touchstone Large 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 Stock and Touchstone Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Stock Selector and Touchstone Large Cap, you can compare the effects of market volatilities on Fidelity Stock and Touchstone Large 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 Stock with a short position of Touchstone Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Stock and Touchstone Large.
Diversification Opportunities for Fidelity Stock and Touchstone Large
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FIDELITY and Touchstone is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Stock Selector and Touchstone Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Large Cap and Fidelity Stock 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 Stock Selector are associated (or correlated) with Touchstone Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Large Cap has no effect on the direction of Fidelity Stock i.e., Fidelity Stock and Touchstone Large go up and down completely randomly.
Pair Corralation between Fidelity Stock and Touchstone Large
Assuming the 90 days horizon Fidelity Stock is expected to generate 1.03 times less return on investment than Touchstone Large. In addition to that, Fidelity Stock is 1.06 times more volatile than Touchstone Large Cap. It trades about 0.12 of its total potential returns per unit of risk. Touchstone Large Cap is currently generating about 0.13 per unit of volatility. If you would invest 1,770 in Touchstone Large Cap on September 1, 2024 and sell it today you would earn a total of 297.00 from holding Touchstone Large Cap or generate 16.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Fidelity Stock Selector vs. Touchstone Large Cap
Performance |
| Timeline |
| Fidelity Stock Selector |
| Touchstone Large Cap |
Fidelity Stock and Touchstone Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Stock and Touchstone Large
The main advantage of trading using opposite Fidelity Stock and Touchstone Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Stock position performs unexpectedly, Touchstone Large 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 Touchstone Large will offset losses from the drop in Touchstone Large's long position.| Fidelity Stock vs. Angel Oak Financial | Fidelity Stock vs. Blackrock Financial Institutions | Fidelity Stock vs. Davis Financial Fund | Fidelity Stock vs. Davis Financial Fund |
| Touchstone Large vs. Touchstone Small Cap | Touchstone Large vs. Mid Cap Growth | Touchstone Large vs. Mid Cap Growth | Touchstone Large vs. Mid Cap Growth |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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