Correlation Between Fidelity Puritan and Consumer Finance
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Consumer Finance 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 Consumer Finance 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 Consumer Finance Portfolio, you can compare the effects of market volatilities on Fidelity Puritan and Consumer Finance 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 Consumer Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Consumer Finance.
Diversification Opportunities for Fidelity Puritan and Consumer Finance
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Consumer is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Consumer Finance Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Finance Por 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 Consumer Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Finance Por has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Consumer Finance go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Consumer Finance
Assuming the 90 days horizon Fidelity Puritan is expected to generate 4.74 times less return on investment than Consumer Finance. But when comparing it to its historical volatility, Fidelity Puritan Fund is 2.29 times less risky than Consumer Finance. It trades about 0.16 of its potential returns per unit of risk. Consumer Finance Portfolio is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,808 in Consumer Finance Portfolio on August 30, 2024 and sell it today you would earn a total of 195.00 from holding Consumer Finance Portfolio or generate 10.79% 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. Consumer Finance Portfolio
Performance |
| Timeline |
| Fidelity Puritan |
| Consumer Finance Por |
Fidelity Puritan and Consumer Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Consumer Finance
The main advantage of trading using opposite Fidelity Puritan and Consumer Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Consumer Finance 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 Consumer Finance will offset losses from the drop in Consumer Finance'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 |
| Consumer Finance vs. HUMANA INC | Consumer Finance vs. Aquagold International | Consumer Finance vs. Barloworld Ltd ADR | Consumer Finance vs. Morningstar Unconstrained Allocation |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |