Correlation Between Fidelity Puritan and Federated Government
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Federated 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 Federated 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 Federated Government Ultrashort, you can compare the effects of market volatilities on Fidelity Puritan and Federated 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 Federated Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Federated Government.
Diversification Opportunities for Fidelity Puritan and Federated Government
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and FEDERATED is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Federated Government Ultrashor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated 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 Federated Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Government has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Federated Government go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Federated Government
Assuming the 90 days horizon Fidelity Puritan Fund is expected to generate 6.6 times more return on investment than Federated Government. However, Fidelity Puritan is 6.6 times more volatile than Federated Government Ultrashort. It trades about 0.17 of its potential returns per unit of risk. Federated Government Ultrashort is currently generating about 0.25 per unit of risk. If you would invest 2,505 in Fidelity Puritan Fund on August 29, 2024 and sell it today you would earn a total of 58.00 from holding Fidelity Puritan Fund or generate 2.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Puritan Fund vs. Federated Government Ultrashor
Performance |
| Timeline |
| Fidelity Puritan |
| Federated Government |
Fidelity Puritan and Federated Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Federated Government
The main advantage of trading using opposite Fidelity Puritan and Federated Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Federated 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 Federated Government will offset losses from the drop in Federated Government's long position.| Fidelity Puritan vs. Federated Government Ultrashort | Fidelity Puritan vs. Bbh Intermediate Municipal | Fidelity Puritan vs. Oklahoma Municipal Fund | Fidelity Puritan vs. T Rowe Price |
| Federated Government vs. Short Term Fund R | Federated Government vs. Putnam Ultra Short | Federated Government vs. HUMANA INC | Federated Government vs. Aquagold International |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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