Correlation Between Fidelity Salem and Gold Portfolio
Can any of the company-specific risk be diversified away by investing in both Fidelity Salem and Gold 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 Gold 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 Gold Portfolio Gold, you can compare the effects of market volatilities on Fidelity Salem and Gold 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 Gold Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Salem and Gold Portfolio.
Diversification Opportunities for Fidelity Salem and Gold Portfolio
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Gold is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Salem Street and Gold Portfolio Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Portfolio Gold 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 Gold Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Portfolio Gold has no effect on the direction of Fidelity Salem i.e., Fidelity Salem and Gold Portfolio go up and down completely randomly.
Pair Corralation between Fidelity Salem and Gold Portfolio
Assuming the 90 days horizon Fidelity Salem is expected to generate 2.74 times less return on investment than Gold Portfolio. But when comparing it to its historical volatility, Fidelity Salem Street is 1.79 times less risky than Gold Portfolio. It trades about 0.26 of its potential returns per unit of risk. Gold Portfolio Gold is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 2,501 in Gold Portfolio Gold on November 5, 2024 and sell it today you would earn a total of 280.00 from holding Gold Portfolio Gold or generate 11.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Salem Street vs. Gold Portfolio Gold
Performance |
| Timeline |
| Fidelity Salem Street |
| Gold Portfolio Gold |
Fidelity Salem and Gold Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Salem and Gold Portfolio
The main advantage of trading using opposite Fidelity Salem and Gold Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Salem position performs unexpectedly, Gold 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 Gold Portfolio will offset losses from the drop in Gold Portfolio's long position.| Fidelity Salem vs. Redwood Real Estate | Fidelity Salem vs. Columbia Real Estate | Fidelity Salem vs. Nexpoint Real Estate | Fidelity Salem vs. Vy Clarion Real |
| Gold Portfolio vs. Fidelity Select Portfolios | Gold Portfolio vs. Fidelity Natural Resources | Gold Portfolio vs. Materials Portfolio Materials | Gold Portfolio vs. Banking Portfolio Banking |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |