Correlation Between Aggressive Growth and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both Aggressive Growth and Fidelity Series 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 Aggressive Growth and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aggressive Growth Allocation and Fidelity Series 1000, you can compare the effects of market volatilities on Aggressive Growth and Fidelity Series 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 Aggressive Growth with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aggressive Growth and Fidelity Series.
Diversification Opportunities for Aggressive Growth and Fidelity Series
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aggressive and Fidelity is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Allocation and Fidelity Series 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series 1000 and Aggressive Growth 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 Aggressive Growth Allocation are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series 1000 has no effect on the direction of Aggressive Growth i.e., Aggressive Growth and Fidelity Series go up and down completely randomly.
Pair Corralation between Aggressive Growth and Fidelity Series
Assuming the 90 days horizon Aggressive Growth Allocation is expected to generate 0.89 times more return on investment than Fidelity Series. However, Aggressive Growth Allocation is 1.13 times less risky than Fidelity Series. It trades about 0.1 of its potential returns per unit of risk. Fidelity Series 1000 is currently generating about 0.08 per unit of risk. If you would invest 838.00 in Aggressive Growth Allocation on August 27, 2024 and sell it today you would earn a total of 322.00 from holding Aggressive Growth Allocation or generate 38.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aggressive Growth Allocation vs. Fidelity Series 1000
Performance |
| Timeline |
| Aggressive Growth |
| Fidelity Series 1000 |
Aggressive Growth and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aggressive Growth and Fidelity Series
The main advantage of trading using opposite Aggressive Growth and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aggressive Growth position performs unexpectedly, Fidelity Series 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 Series will offset losses from the drop in Fidelity Series' long position.| Aggressive Growth vs. 1919 Financial Services | Aggressive Growth vs. Financials Ultrasector Profund | Aggressive Growth vs. Goldman Sachs Financial | Aggressive Growth vs. Prudential Jennison Financial |
| Fidelity Series vs. Calvert Global Energy | Fidelity Series vs. Clearbridge Energy Mlp | Fidelity Series vs. Hennessy Bp Energy | Fidelity Series vs. Energy Basic Materials |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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