Correlation Between Fidelity Sai and Aristotle Value
Can any of the company-specific risk be diversified away by investing in both Fidelity Sai and Aristotle Value 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 Sai and Aristotle Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Sai Convertible and Aristotle Value Equity, you can compare the effects of market volatilities on Fidelity Sai and Aristotle Value 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 Sai with a short position of Aristotle Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sai and Aristotle Value.
Diversification Opportunities for Fidelity Sai and Aristotle Value
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Aristotle is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai Convertible and Aristotle Value Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Value Equity and Fidelity Sai 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 Sai Convertible are associated (or correlated) with Aristotle Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Value Equity has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and Aristotle Value go up and down completely randomly.
Pair Corralation between Fidelity Sai and Aristotle Value
Assuming the 90 days horizon Fidelity Sai is expected to generate 1.85 times less return on investment than Aristotle Value. But when comparing it to its historical volatility, Fidelity Sai Convertible is 5.38 times less risky than Aristotle Value. It trades about 0.25 of its potential returns per unit of risk. Aristotle Value Equity is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,063 in Aristotle Value Equity on September 3, 2024 and sell it today you would earn a total of 290.00 from holding Aristotle Value Equity or generate 14.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 68.93% |
| Values | Daily Returns |
Fidelity Sai Convertible vs. Aristotle Value Equity
Performance |
| Timeline |
| Fidelity Sai Convertible |
| Aristotle Value Equity |
Fidelity Sai and Aristotle Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Sai and Aristotle Value
The main advantage of trading using opposite Fidelity Sai and Aristotle Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Sai position performs unexpectedly, Aristotle Value 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 Aristotle Value will offset losses from the drop in Aristotle Value's long position.| Fidelity Sai vs. Calamos Market Neutral | Fidelity Sai vs. Calamos Market Neutral | Fidelity Sai vs. Calamos Market Neutral | Fidelity Sai vs. Calamos Market Neutral |
| Aristotle Value vs. Old Westbury Large | Aristotle Value vs. Artisan Thematic Fund | Aristotle Value vs. Growth Strategy Fund | Aristotle Value vs. Principal Lifetime Hybrid |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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