Correlation Between Fidelity Puritan and Hodges Blue
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Hodges Blue 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 Hodges Blue 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 Hodges Blue Chip, you can compare the effects of market volatilities on Fidelity Puritan and Hodges Blue 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 Hodges Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Hodges Blue.
Diversification Opportunities for Fidelity Puritan and Hodges Blue
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Hodges is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Hodges Blue Chip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hodges Blue Chip 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 Hodges Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hodges Blue Chip has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Hodges Blue go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Hodges Blue
Assuming the 90 days horizon Fidelity Puritan is expected to generate 1.63 times less return on investment than Hodges Blue. But when comparing it to its historical volatility, Fidelity Puritan Fund is 1.18 times less risky than Hodges Blue. It trades about 0.1 of its potential returns per unit of risk. Hodges Blue Chip is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,844 in Hodges Blue Chip on August 31, 2024 and sell it today you would earn a total of 922.00 from holding Hodges Blue Chip or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Puritan Fund vs. Hodges Blue Chip
Performance |
| Timeline |
| Fidelity Puritan |
| Hodges Blue Chip |
Fidelity Puritan and Hodges Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Hodges Blue
The main advantage of trading using opposite Fidelity Puritan and Hodges Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Hodges Blue 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 Hodges Blue will offset losses from the drop in Hodges Blue'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 |
| Hodges Blue vs. Aquagold International | Hodges Blue vs. Morningstar Unconstrained Allocation | Hodges Blue vs. Thrivent High Yield | Hodges Blue vs. Via Renewables |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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