Correlation Between Fidelity Salem and Fidelity New
Can any of the company-specific risk be diversified away by investing in both Fidelity Salem and Fidelity New 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 Fidelity New 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 Fidelity New Millennium, you can compare the effects of market volatilities on Fidelity Salem and Fidelity New 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 Fidelity New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Salem and Fidelity New.
Diversification Opportunities for Fidelity Salem and Fidelity New
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Fidelity is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Salem Street and Fidelity New Millennium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity New Millennium 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 Fidelity New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity New Millennium has no effect on the direction of Fidelity Salem i.e., Fidelity Salem and Fidelity New go up and down completely randomly.
Pair Corralation between Fidelity Salem and Fidelity New
Assuming the 90 days horizon Fidelity Salem Street is expected to under-perform the Fidelity New. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Salem Street is 1.04 times less risky than Fidelity New. The mutual fund trades about -0.22 of its potential returns per unit of risk. The Fidelity New Millennium is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 6,050 in Fidelity New Millennium on August 29, 2024 and sell it today you would earn a total of 215.00 from holding Fidelity New Millennium or generate 3.55% 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. Fidelity New Millennium
Performance |
| Timeline |
| Fidelity Salem Street |
| Fidelity New Millennium |
Fidelity Salem and Fidelity New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Salem and Fidelity New
The main advantage of trading using opposite Fidelity Salem and Fidelity New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Salem position performs unexpectedly, Fidelity New 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 Fidelity New will offset losses from the drop in Fidelity New's long position.| Fidelity Salem vs. Balanced Fund Investor | Fidelity Salem vs. Western Asset Municipal | Fidelity Salem vs. Falcon Focus Scv | Fidelity Salem vs. Abr 7525 Volatility |
| Fidelity New vs. Value Fund Investor | Fidelity New vs. HUMANA INC | Fidelity New vs. Aquagold International | Fidelity New vs. Barloworld Ltd ADR |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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