Correlation Between Fidelity Income and Consumer Finance
Can any of the company-specific risk be diversified away by investing in both Fidelity Income and Consumer Finance 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 Income and Consumer Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Income Replacement and Consumer Finance Portfolio, you can compare the effects of market volatilities on Fidelity Income and Consumer Finance 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 Income with a short position of Consumer Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Income and Consumer Finance.
Diversification Opportunities for Fidelity Income and Consumer Finance
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Consumer is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Income Replacement and Consumer Finance Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Finance Por and Fidelity Income 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 Income Replacement are associated (or correlated) with Consumer Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Finance Por has no effect on the direction of Fidelity Income i.e., Fidelity Income and Consumer Finance go up and down completely randomly.
Pair Corralation between Fidelity Income and Consumer Finance
Assuming the 90 days horizon Fidelity Income is expected to generate 6.27 times less return on investment than Consumer Finance. But when comparing it to its historical volatility, Fidelity Income Replacement is 4.12 times less risky than Consumer Finance. It trades about 0.12 of its potential returns per unit of risk. Consumer Finance Portfolio is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,566 in Consumer Finance Portfolio on September 1, 2024 and sell it today you would earn a total of 444.00 from holding Consumer Finance Portfolio or generate 28.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Income Replacement vs. Consumer Finance Portfolio
Performance |
| Timeline |
| Fidelity Income Repl |
| Consumer Finance Por |
Fidelity Income and Consumer Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Income and Consumer Finance
The main advantage of trading using opposite Fidelity Income and Consumer Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Income position performs unexpectedly, Consumer Finance 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 Consumer Finance will offset losses from the drop in Consumer Finance's long position.| Fidelity Income vs. Rationalpier 88 Convertible | Fidelity Income vs. California Bond Fund | Fidelity Income vs. Blrc Sgy Mnp | Fidelity Income vs. Dreyfusstandish Global Fixed |
| Consumer Finance vs. Banking Portfolio Banking | Consumer Finance vs. Insurance Portfolio Insurance | Consumer Finance vs. Financial Services Portfolio | Consumer Finance vs. Automotive Portfolio Automotive |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |