Correlation Between Fidelity Puritan and Banking Portfolio
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Banking 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 Banking 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 Banking Portfolio Banking, you can compare the effects of market volatilities on Fidelity Puritan and Banking 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 Banking Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Banking Portfolio.
Diversification Opportunities for Fidelity Puritan and Banking Portfolio
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Banking is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Banking Portfolio Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banking Portfolio Banking 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 Banking Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banking Portfolio Banking has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Banking Portfolio go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Banking Portfolio
Assuming the 90 days horizon Fidelity Puritan is expected to generate 7.22 times less return on investment than Banking Portfolio. But when comparing it to its historical volatility, Fidelity Puritan Fund is 4.7 times less risky than Banking Portfolio. It trades about 0.14 of its potential returns per unit of risk. Banking Portfolio Banking is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,051 in Banking Portfolio Banking on August 26, 2024 and sell it today you would earn a total of 409.00 from holding Banking Portfolio Banking or generate 13.41% 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. Banking Portfolio Banking
Performance |
| Timeline |
| Fidelity Puritan |
| Banking Portfolio Banking |
Fidelity Puritan and Banking Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Banking Portfolio
The main advantage of trading using opposite Fidelity Puritan and Banking Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Banking 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 Banking Portfolio will offset losses from the drop in Banking Portfolio's long position.| Fidelity Puritan vs. California Bond Fund | Fidelity Puritan vs. Touchstone Premium Yield | Fidelity Puritan vs. Gmo Emerging Country | Fidelity Puritan vs. Mirova Global Green |
| Banking Portfolio vs. Fidelity Freedom 2015 | Banking Portfolio vs. Fidelity Puritan Fund | Banking Portfolio vs. Fidelity Puritan Fund | Banking 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |