Correlation Between Fidelity New and Grant Park
Can any of the company-specific risk be diversified away by investing in both Fidelity New and Grant Park 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 New and Grant Park into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity New Millennium and Grant Park Multi, you can compare the effects of market volatilities on Fidelity New and Grant Park 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 New with a short position of Grant Park. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Grant Park.
Diversification Opportunities for Fidelity New and Grant Park
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Grant is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Millennium and Grant Park Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grant Park Multi and Fidelity New 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 New Millennium are associated (or correlated) with Grant Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grant Park Multi has no effect on the direction of Fidelity New i.e., Fidelity New and Grant Park go up and down completely randomly.
Pair Corralation between Fidelity New and Grant Park
Assuming the 90 days horizon Fidelity New Millennium is expected to generate 1.59 times more return on investment than Grant Park. However, Fidelity New is 1.59 times more volatile than Grant Park Multi. It trades about 0.25 of its potential returns per unit of risk. Grant Park Multi is currently generating about -0.02 per unit of risk. If you would invest 5,633 in Fidelity New Millennium on September 4, 2024 and sell it today you would earn a total of 694.00 from holding Fidelity New Millennium or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity New Millennium vs. Grant Park Multi
Performance |
| Timeline |
| Fidelity New Millennium |
| Grant Park Multi |
Fidelity New and Grant Park Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity New and Grant Park
The main advantage of trading using opposite Fidelity New and Grant Park positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New position performs unexpectedly, Grant Park 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 Grant Park will offset losses from the drop in Grant Park's long position.| Fidelity New vs. Fidelity Focused Stock | Fidelity New vs. Fidelity Large Cap | Fidelity New vs. Computers Portfolio Puters | Fidelity New vs. Fidelity Trend Fund |
| Grant Park vs. Dunham Large Cap | Grant Park vs. Vela Large Cap | Grant Park vs. Qs Large Cap | Grant Park vs. Siit 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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