Correlation Between Fidelity Puritan and Fidelity Balanced
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Fidelity Balanced 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 Puritan and Fidelity Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Puritan Fund and Fidelity Balanced Fund, you can compare the effects of market volatilities on Fidelity Puritan and Fidelity Balanced 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 Puritan with a short position of Fidelity Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Fidelity Balanced.
Diversification Opportunities for Fidelity Puritan and Fidelity Balanced
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Fidelity Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Balanced and Fidelity Puritan 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 Puritan Fund are associated (or correlated) with Fidelity Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Balanced has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Fidelity Balanced go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Fidelity Balanced
Assuming the 90 days horizon Fidelity Puritan Fund is expected to under-perform the Fidelity Balanced. In addition to that, Fidelity Puritan is 1.18 times more volatile than Fidelity Balanced Fund. It trades about -0.11 of its total potential returns per unit of risk. Fidelity Balanced Fund is currently generating about -0.07 per unit of volatility. If you would invest 2,936 in Fidelity Balanced Fund on December 11, 2024 and sell it today you would lose (67.00) from holding Fidelity Balanced Fund or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Puritan Fund vs. Fidelity Balanced Fund
Performance |
| Timeline |
| Fidelity Puritan |
| Fidelity Balanced |
Fidelity Puritan and Fidelity Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Fidelity Balanced
The main advantage of trading using opposite Fidelity Puritan and Fidelity Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Fidelity Balanced 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 Fidelity Balanced will offset losses from the drop in Fidelity Balanced's long position.| Fidelity Puritan vs. Intermediate Term Bond Fund | Fidelity Puritan vs. Rbc Ultra Short Fixed | Fidelity Puritan vs. Doubleline Total Return | Fidelity Puritan vs. Morningstar Defensive Bond |
| Fidelity Balanced vs. Fidelity Puritan Fund | Fidelity Balanced vs. Fidelity Low Priced Stock | Fidelity Balanced vs. Fidelity International Discovery | Fidelity Balanced vs. Fidelity Contrafund |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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