Correlation Between Fidelity Puritan and Materials Portfolio
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Materials Portfolio 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 Materials Portfolio 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 Materials Portfolio Fidelity, you can compare the effects of market volatilities on Fidelity Puritan and Materials Portfolio 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 Materials Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Materials Portfolio.
Diversification Opportunities for Fidelity Puritan and Materials Portfolio
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Materials is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Materials Portfolio Fidelity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Portfolio 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 Materials Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Portfolio has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Materials Portfolio go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Materials Portfolio
Assuming the 90 days horizon Fidelity Puritan Fund is expected to generate 0.68 times more return on investment than Materials Portfolio. However, Fidelity Puritan Fund is 1.46 times less risky than Materials Portfolio. It trades about 0.13 of its potential returns per unit of risk. Materials Portfolio Fidelity is currently generating about 0.06 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 | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fidelity Puritan Fund vs. Materials Portfolio Fidelity
Performance |
| Timeline |
| Fidelity Puritan |
| Materials Portfolio |
Fidelity Puritan and Materials Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Materials Portfolio
The main advantage of trading using opposite Fidelity Puritan and Materials Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Materials Portfolio 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 Materials Portfolio will offset losses from the drop in Materials Portfolio'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 |
| Materials Portfolio vs. Fidelity Freedom 2015 | Materials Portfolio vs. Fidelity Puritan Fund | Materials Portfolio vs. Fidelity Puritan Fund | Materials Portfolio 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |