Correlation Between Fidelity Puritan and Payden Corporate
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Payden Corporate 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 Payden Corporate 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 Payden Corporate Bond, you can compare the effects of market volatilities on Fidelity Puritan and Payden Corporate 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 Payden Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Payden Corporate.
Diversification Opportunities for Fidelity Puritan and Payden Corporate
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Payden is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Payden Corporate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Corporate Bond 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 Payden Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Corporate Bond has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Payden Corporate go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Payden Corporate
Assuming the 90 days horizon Fidelity Puritan Fund is expected to generate 1.78 times more return on investment than Payden Corporate. However, Fidelity Puritan is 1.78 times more volatile than Payden Corporate Bond. It trades about 0.1 of its potential returns per unit of risk. Payden Corporate Bond is currently generating about 0.09 per unit of risk. If you would invest 1,874 in Fidelity Puritan Fund on August 30, 2024 and sell it today you would earn a total of 692.00 from holding Fidelity Puritan Fund or generate 36.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 50.51% |
| Values | Daily Returns |
Fidelity Puritan Fund vs. Payden Corporate Bond
Performance |
| Timeline |
| Fidelity Puritan |
| Payden Corporate Bond |
Fidelity Puritan and Payden Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Payden Corporate
The main advantage of trading using opposite Fidelity Puritan and Payden Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Payden Corporate 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 Payden Corporate will offset losses from the drop in Payden Corporate'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 |
| Payden Corporate vs. Vanguard Total Stock | Payden Corporate vs. Vanguard 500 Index | Payden Corporate vs. Vanguard Total Stock | Payden Corporate 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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