Correlation Between Growth Allocation and Fidelity Asset
Can any of the company-specific risk be diversified away by investing in both Growth Allocation and Fidelity Asset 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 Growth Allocation and Fidelity Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Allocation Index and Fidelity Asset Manager, you can compare the effects of market volatilities on Growth Allocation and Fidelity Asset 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 Growth Allocation with a short position of Fidelity Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Allocation and Fidelity Asset.
Diversification Opportunities for Growth Allocation and Fidelity Asset
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Growth and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Growth Allocation Index and Fidelity Asset Manager in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Asset Manager and Growth Allocation 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 Growth Allocation Index are associated (or correlated) with Fidelity Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Asset Manager has no effect on the direction of Growth Allocation i.e., Growth Allocation and Fidelity Asset go up and down completely randomly.
Pair Corralation between Growth Allocation and Fidelity Asset
Assuming the 90 days horizon Growth Allocation Index is expected to generate 0.96 times more return on investment than Fidelity Asset. However, Growth Allocation Index is 1.04 times less risky than Fidelity Asset. It trades about 0.09 of its potential returns per unit of risk. Fidelity Asset Manager is currently generating about 0.08 per unit of risk. If you would invest 1,113 in Growth Allocation Index on August 27, 2024 and sell it today you would earn a total of 11.00 from holding Growth Allocation Index or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Allocation Index vs. Fidelity Asset Manager
Performance |
| Timeline |
| Growth Allocation Index |
| Fidelity Asset Manager |
Growth Allocation and Fidelity Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Allocation and Fidelity Asset
The main advantage of trading using opposite Growth Allocation and Fidelity Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Allocation position performs unexpectedly, Fidelity Asset 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 Asset will offset losses from the drop in Fidelity Asset's long position.| Growth Allocation vs. Fidelity Freedom 2015 | Growth Allocation vs. Fidelity Puritan Fund | Growth Allocation vs. Fidelity Puritan Fund | Growth Allocation vs. Fidelity Pennsylvania Municipal |
| Fidelity Asset vs. Fidelity Freedom 2015 | Fidelity Asset vs. Fidelity Puritan Fund | Fidelity Asset vs. Fidelity Puritan Fund | Fidelity Asset vs. Fidelity Pennsylvania Municipal |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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