Correlation Between Fidelity Magellan and Virtus Westchester
Can any of the company-specific risk be diversified away by investing in both Fidelity Magellan and Virtus Westchester 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 Magellan and Virtus Westchester into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Magellan Fund and Virtus Westchester Credit, you can compare the effects of market volatilities on Fidelity Magellan and Virtus Westchester 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 Magellan with a short position of Virtus Westchester. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Magellan and Virtus Westchester.
Diversification Opportunities for Fidelity Magellan and Virtus Westchester
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Virtus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Magellan Fund and Virtus Westchester Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Westchester Credit and Fidelity Magellan 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 Magellan Fund are associated (or correlated) with Virtus Westchester. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Westchester Credit has no effect on the direction of Fidelity Magellan i.e., Fidelity Magellan and Virtus Westchester go up and down completely randomly.
Pair Corralation between Fidelity Magellan and Virtus Westchester
Assuming the 90 days horizon Fidelity Magellan Fund is expected to under-perform the Virtus Westchester. In addition to that, Fidelity Magellan is 11.94 times more volatile than Virtus Westchester Credit. It trades about -0.12 of its total potential returns per unit of risk. Virtus Westchester Credit is currently generating about 0.39 per unit of volatility. If you would invest 1,166 in Virtus Westchester Credit on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Virtus Westchester Credit or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Magellan Fund vs. Virtus Westchester Credit
Performance |
| Timeline |
| Fidelity Magellan |
| Virtus Westchester Credit |
Fidelity Magellan and Virtus Westchester Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Magellan and Virtus Westchester
The main advantage of trading using opposite Fidelity Magellan and Virtus Westchester positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Magellan position performs unexpectedly, Virtus Westchester 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 Virtus Westchester will offset losses from the drop in Virtus Westchester's long position.| Fidelity Magellan vs. Fidelity Growth Income | Fidelity Magellan vs. Fidelity Equity Income Fund | Fidelity Magellan vs. Fidelity Contrafund | Fidelity Magellan vs. Fidelity Growth Pany |
| Virtus Westchester vs. Washington Mutual Investors | Virtus Westchester vs. Fisher Large Cap | Virtus Westchester vs. Qs Large Cap | Virtus Westchester vs. Guidemark Large Cap |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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