Correlation Between Fidelity Puritan and Fidelity Government
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Fidelity Government 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 Government 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 Government Income, you can compare the effects of market volatilities on Fidelity Puritan and Fidelity Government 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 Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Fidelity Government.
Diversification Opportunities for Fidelity Puritan and Fidelity Government
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fidelity and Fidelity is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Fidelity Government Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Government 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 Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Government has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Fidelity Government go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Fidelity Government
Assuming the 90 days horizon Fidelity Puritan Fund is expected to generate 1.72 times more return on investment than Fidelity Government. However, Fidelity Puritan is 1.72 times more volatile than Fidelity Government Income. It trades about 0.17 of its potential returns per unit of risk. Fidelity Government Income is currently generating about 0.08 per unit of risk. If you would invest 2,508 in Fidelity Puritan Fund on August 30, 2024 and sell it today you would earn a total of 60.00 from holding Fidelity Puritan Fund or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Puritan Fund vs. Fidelity Government Income
Performance |
| Timeline |
| Fidelity Puritan |
| Fidelity Government |
Fidelity Puritan and Fidelity Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Fidelity Government
The main advantage of trading using opposite Fidelity Puritan and Fidelity Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Fidelity Government 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 Government will offset losses from the drop in Fidelity Government's long position.| Fidelity Puritan vs. Kinetics Small Cap | Fidelity Puritan vs. Small Pany Growth | Fidelity Puritan vs. T Rowe Price | Fidelity Puritan vs. Small Midcap Dividend Income |
| Fidelity Government vs. Fidelity Freedom 2015 | Fidelity Government vs. Fidelity Puritan Fund | Fidelity Government vs. Fidelity Puritan Fund | Fidelity Government vs. Fidelity Pennsylvania Municipal |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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