Correlation Between Fidelity Puritan and Fidelity Capital
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Fidelity Capital 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 Capital 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 Capital Income, you can compare the effects of market volatilities on Fidelity Puritan and Fidelity Capital 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 Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Fidelity Capital.
Diversification Opportunities for Fidelity Puritan and Fidelity Capital
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Fidelity Capital Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Capital Income 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 Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Capital Income has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Fidelity Capital go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Fidelity Capital
Assuming the 90 days horizon Fidelity Puritan is expected to generate 1.09 times less return on investment than Fidelity Capital. In addition to that, Fidelity Puritan is 2.2 times more volatile than Fidelity Capital Income. It trades about 0.06 of its total potential returns per unit of risk. Fidelity Capital Income is currently generating about 0.14 per unit of volatility. If you would invest 814.00 in Fidelity Capital Income on November 1, 2024 and sell it today you would earn a total of 214.00 from holding Fidelity Capital Income or generate 26.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Puritan Fund vs. Fidelity Capital Income
Performance |
| Timeline |
| Fidelity Puritan |
| Fidelity Capital Income |
Fidelity Puritan and Fidelity Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Fidelity Capital
The main advantage of trading using opposite Fidelity Puritan and Fidelity Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Fidelity Capital 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 Capital will offset losses from the drop in Fidelity Capital's long position.| Fidelity Puritan vs. Fidelity Balanced Fund | Fidelity Puritan vs. Fidelity Magellan Fund | Fidelity Puritan vs. Fidelity Growth Income | Fidelity Puritan vs. Fidelity Equity Income Fund |
| Fidelity Capital vs. Fidelity High Income | Fidelity Capital vs. Fidelity New Markets | Fidelity Capital vs. Fidelity Total Bond | Fidelity Capital vs. Fidelity Balanced Fund |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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