Correlation Between Growth Allocation and Fidelity Intermediate
Can any of the company-specific risk be diversified away by investing in both Growth Allocation and Fidelity Intermediate 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 Intermediate 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 Intermediate Bond, you can compare the effects of market volatilities on Growth Allocation and Fidelity Intermediate 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 Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Allocation and Fidelity Intermediate.
Diversification Opportunities for Growth Allocation and Fidelity Intermediate
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Growth and Fidelity is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Growth Allocation Index and Fidelity Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Intermediate 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 Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Intermediate has no effect on the direction of Growth Allocation i.e., Growth Allocation and Fidelity Intermediate go up and down completely randomly.
Pair Corralation between Growth Allocation and Fidelity Intermediate
Assuming the 90 days horizon Growth Allocation Index is expected to generate 3.01 times more return on investment than Fidelity Intermediate. However, Growth Allocation is 3.01 times more volatile than Fidelity Intermediate Bond. It trades about 0.24 of its potential returns per unit of risk. Fidelity Intermediate Bond is currently generating about 0.17 per unit of risk. If you would invest 1,090 in Growth Allocation Index on November 9, 2024 and sell it today you would earn a total of 32.00 from holding Growth Allocation Index or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Allocation Index vs. Fidelity Intermediate Bond
Performance |
| Timeline |
| Growth Allocation Index |
| Fidelity Intermediate |
Growth Allocation and Fidelity Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Allocation and Fidelity Intermediate
The main advantage of trading using opposite Growth Allocation and Fidelity Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Allocation position performs unexpectedly, Fidelity Intermediate 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 Intermediate will offset losses from the drop in Fidelity Intermediate's long position.| Growth Allocation vs. Calvert Short Duration | Growth Allocation vs. Leader Short Term Bond | Growth Allocation vs. Siit Ultra Short | Growth Allocation vs. Cmg Ultra Short |
| Fidelity Intermediate vs. T Rowe Price | Fidelity Intermediate vs. T Rowe Price | Fidelity Intermediate vs. T Rowe Price | Fidelity Intermediate vs. Jpmorgan High Yield |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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