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 Blue, 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
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aggressive and FIDELITY is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Allocation and Fidelity Series Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Blue 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 Blue 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 is expected to generate 1.46 times less return on investment than Fidelity Series. But when comparing it to its historical volatility, Aggressive Growth Allocation is 1.95 times less risky than Fidelity Series. It trades about 0.12 of its potential returns per unit of risk. Fidelity Series Blue is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,753 in Fidelity Series Blue on September 5, 2024 and sell it today you would earn a total of 249.00 from holding Fidelity Series Blue or generate 14.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Aggressive Growth Allocation vs. Fidelity Series Blue
Performance |
| Timeline |
| Aggressive Growth |
| Fidelity Series Blue |
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. Needham Aggressive Growth | Aggressive Growth vs. Guggenheim High Yield | Aggressive Growth vs. Pioneer High Yield | Aggressive Growth vs. T Rowe Price |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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