Correlation Between Fidelity Puritan and Alternative Credit
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Alternative Credit 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 Alternative Credit 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 Alternative Credit Income, you can compare the effects of market volatilities on Fidelity Puritan and Alternative Credit 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 Alternative Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Alternative Credit.
Diversification Opportunities for Fidelity Puritan and Alternative Credit
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Alternative is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Alternative Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Credit 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 Alternative Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Credit Income has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Alternative Credit go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Alternative Credit
Assuming the 90 days horizon Fidelity Puritan Fund is expected to generate 2.52 times more return on investment than Alternative Credit. However, Fidelity Puritan is 2.52 times more volatile than Alternative Credit Income. It trades about 0.11 of its potential returns per unit of risk. Alternative Credit Income is currently generating about 0.08 per unit of risk. If you would invest 1,967 in Fidelity Puritan Fund on August 30, 2024 and sell it today you would earn a total of 599.00 from holding Fidelity Puritan Fund or generate 30.45% 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. Alternative Credit Income
Performance |
| Timeline |
| Fidelity Puritan |
| Alternative Credit Income |
Fidelity Puritan and Alternative Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Alternative Credit
The main advantage of trading using opposite Fidelity Puritan and Alternative Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Alternative Credit 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 Alternative Credit will offset losses from the drop in Alternative Credit'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 |
| Alternative Credit vs. Aig Government Money | Alternative Credit vs. Blackrock Government Bond | Alternative Credit vs. Dws Government Money | Alternative Credit vs. Franklin Adjustable Government |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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