Correlation Between Fidelity Puritan and Gotham Hedged
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Gotham Hedged 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 Gotham Hedged 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 Gotham Hedged E, you can compare the effects of market volatilities on Fidelity Puritan and Gotham Hedged 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 Gotham Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Gotham Hedged.
Diversification Opportunities for Fidelity Puritan and Gotham Hedged
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Gotham is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Gotham Hedged E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gotham Hedged E 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 Gotham Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gotham Hedged E has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Gotham Hedged go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Gotham Hedged
Assuming the 90 days horizon Fidelity Puritan is expected to generate 1.1 times less return on investment than Gotham Hedged. But when comparing it to its historical volatility, Fidelity Puritan Fund is 1.22 times less risky than Gotham Hedged. It trades about 0.18 of its potential returns per unit of risk. Gotham Hedged E is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,337 in Gotham Hedged E on August 30, 2024 and sell it today you would earn a total of 39.00 from holding Gotham Hedged E or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fidelity Puritan Fund vs. Gotham Hedged E
Performance |
| Timeline |
| Fidelity Puritan |
| Gotham Hedged E |
Fidelity Puritan and Gotham Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Gotham Hedged
The main advantage of trading using opposite Fidelity Puritan and Gotham Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Gotham Hedged 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 Gotham Hedged will offset losses from the drop in Gotham Hedged'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 |
| Gotham Hedged vs. Invesco Technology Fund | Gotham Hedged vs. Mfs Technology Fund | Gotham Hedged vs. Science Technology Fund | Gotham Hedged vs. Goldman Sachs Technology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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