Correlation Between Fidelity Puritan and Fidelity Managed
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Fidelity Managed 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 Managed 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 Managed Retirement, you can compare the effects of market volatilities on Fidelity Puritan and Fidelity Managed 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 Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Fidelity Managed.
Diversification Opportunities for Fidelity Puritan and Fidelity Managed
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fidelity and Fidelity is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Fidelity Managed Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Managed Ret 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 Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Managed Ret has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Fidelity Managed go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Fidelity Managed
Assuming the 90 days horizon Fidelity Puritan Fund is expected to generate 1.91 times more return on investment than Fidelity Managed. However, Fidelity Puritan is 1.91 times more volatile than Fidelity Managed Retirement. It trades about 0.13 of its potential returns per unit of risk. Fidelity Managed Retirement is currently generating about -0.02 per unit of risk. If you would invest 2,501 in Fidelity Puritan Fund on August 25, 2024 and sell it today you would earn a total of 44.00 from holding Fidelity Puritan Fund or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fidelity Puritan Fund vs. Fidelity Managed Retirement
Performance |
| Timeline |
| Fidelity Puritan |
| Fidelity Managed Ret |
Fidelity Puritan and Fidelity Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Fidelity Managed
The main advantage of trading using opposite Fidelity Puritan and Fidelity Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Fidelity Managed 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 Managed will offset losses from the drop in Fidelity Managed's long position.| Fidelity Puritan vs. Fidelity Advisor Balanced | Fidelity Puritan vs. Fidelity Advisor Balanced | Fidelity Puritan vs. Fidelity Advisor Growth | Fidelity Puritan vs. Fidelity Advisor Equity |
| Fidelity Managed vs. Fidelity Freedom 2015 | Fidelity Managed vs. Fidelity Puritan Fund | Fidelity Managed vs. Fidelity Puritan Fund | Fidelity Managed 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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