Correlation Between Fidelity Salem and Multimedia Portfolio
Can any of the company-specific risk be diversified away by investing in both Fidelity Salem and Multimedia Portfolio 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 Salem and Multimedia Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Salem Street and Multimedia Portfolio Multimedia, you can compare the effects of market volatilities on Fidelity Salem and Multimedia Portfolio 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 Salem with a short position of Multimedia Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Salem and Multimedia Portfolio.
Diversification Opportunities for Fidelity Salem and Multimedia Portfolio
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Multimedia is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Salem Street and Multimedia Portfolio Multimedi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimedia Portfolio and Fidelity Salem 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 Salem Street are associated (or correlated) with Multimedia Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimedia Portfolio has no effect on the direction of Fidelity Salem i.e., Fidelity Salem and Multimedia Portfolio go up and down completely randomly.
Pair Corralation between Fidelity Salem and Multimedia Portfolio
Assuming the 90 days horizon Fidelity Salem Street is expected to under-perform the Multimedia Portfolio. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Salem Street is 1.3 times less risky than Multimedia Portfolio. The mutual fund trades about -0.31 of its potential returns per unit of risk. The Multimedia Portfolio Multimedia is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10,791 in Multimedia Portfolio Multimedia on August 27, 2024 and sell it today you would earn a total of 248.00 from holding Multimedia Portfolio Multimedia or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Salem Street vs. Multimedia Portfolio Multimedi
Performance |
| Timeline |
| Fidelity Salem Street |
| Multimedia Portfolio |
Fidelity Salem and Multimedia Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Salem and Multimedia Portfolio
The main advantage of trading using opposite Fidelity Salem and Multimedia Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Salem position performs unexpectedly, Multimedia Portfolio 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 Multimedia Portfolio will offset losses from the drop in Multimedia Portfolio's long position.| Fidelity Salem vs. Fidelity Total International | Fidelity Salem vs. Fidelity Mega Cap | Fidelity Salem vs. Fidelity International Value |
| Multimedia Portfolio vs. Fidelity Freedom 2015 | Multimedia Portfolio vs. Fidelity Puritan Fund | Multimedia Portfolio vs. Fidelity Puritan Fund | Multimedia Portfolio vs. Fidelity Pennsylvania Municipal |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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