Correlation Between Fidelity Income and Frost Kempner
Can any of the company-specific risk be diversified away by investing in both Fidelity Income and Frost Kempner 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 Frost Kempner 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 Frost Kempner Treasury, you can compare the effects of market volatilities on Fidelity Income and Frost Kempner 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 Frost Kempner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Income and Frost Kempner.
Diversification Opportunities for Fidelity Income and Frost Kempner
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Frost is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Income Replacement and Frost Kempner Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Kempner Treasury 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 Frost Kempner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Kempner Treasury has no effect on the direction of Fidelity Income i.e., Fidelity Income and Frost Kempner go up and down completely randomly.
Pair Corralation between Fidelity Income and Frost Kempner
Assuming the 90 days horizon Fidelity Income Replacement is expected to generate 2.12 times more return on investment than Frost Kempner. However, Fidelity Income is 2.12 times more volatile than Frost Kempner Treasury. It trades about 0.11 of its potential returns per unit of risk. Frost Kempner Treasury is currently generating about 0.17 per unit of risk. If you would invest 5,479 in Fidelity Income Replacement on September 3, 2024 and sell it today you would earn a total of 210.00 from holding Fidelity Income Replacement or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Income Replacement vs. Frost Kempner Treasury
Performance |
| Timeline |
| Fidelity Income Repl |
| Frost Kempner Treasury |
Fidelity Income and Frost Kempner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Income and Frost Kempner
The main advantage of trading using opposite Fidelity Income and Frost Kempner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Income position performs unexpectedly, Frost Kempner 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 Frost Kempner will offset losses from the drop in Frost Kempner's long position.| Fidelity Income vs. Fidelity Income Replacement | Fidelity Income vs. Fidelity Income Replacement | Fidelity Income vs. Fidelity Income Replacement | Fidelity Income vs. Fidelity Income Replacement |
| Frost Kempner vs. SPACE | Frost Kempner vs. Bayview Acquisition Corp | Frost Kempner vs. Ampleforth | Frost Kempner vs. ionet |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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