Correlation Between Fidelity Puritan and Fidelity Growth
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Fidelity Growth 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 Growth 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 Growth Income, you can compare the effects of market volatilities on Fidelity Puritan and Fidelity Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Fidelity Growth.
Diversification Opportunities for Fidelity Puritan and Fidelity Growth
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Fidelity Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Growth 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 Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Growth Income has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Fidelity Growth go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Fidelity Growth
Assuming the 90 days horizon Fidelity Puritan is expected to generate 1.03 times less return on investment than Fidelity Growth. But when comparing it to its historical volatility, Fidelity Puritan Fund is 1.14 times less risky than Fidelity Growth. It trades about 0.1 of its potential returns per unit of risk. Fidelity Growth Income is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,916 in Fidelity Growth Income on September 3, 2024 and sell it today you would earn a total of 690.00 from holding Fidelity Growth Income or generate 11.66% 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 Growth Income
Performance |
| Timeline |
| Fidelity Puritan |
| Fidelity Growth Income |
Fidelity Puritan and Fidelity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Fidelity Growth
The main advantage of trading using opposite Fidelity Puritan and Fidelity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Fidelity Growth 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 Growth will offset losses from the drop in Fidelity Growth'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 Growth vs. Vanguard Total Stock | Fidelity Growth vs. Vanguard 500 Index | Fidelity Growth vs. Vanguard Total Stock | Fidelity Growth vs. Vanguard Total Stock |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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