Correlation Between Fidelity Sai and Franklin Natural
Can any of the company-specific risk be diversified away by investing in both Fidelity Sai and Franklin Natural 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 Franklin Natural 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 Franklin Natural Resources, you can compare the effects of market volatilities on Fidelity Sai and Franklin Natural 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 Franklin Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sai and Franklin Natural.
Diversification Opportunities for Fidelity Sai and Franklin Natural
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Franklin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai Convertible and Franklin Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Natural Res 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 Franklin Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Natural Res has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and Franklin Natural go up and down completely randomly.
Pair Corralation between Fidelity Sai and Franklin Natural
Assuming the 90 days horizon Fidelity Sai Convertible is expected to generate 0.1 times more return on investment than Franklin Natural. However, Fidelity Sai Convertible is 10.11 times less risky than Franklin Natural. It trades about 0.47 of its potential returns per unit of risk. Franklin Natural Resources is currently generating about 0.02 per unit of risk. If you would invest 1,032 in Fidelity Sai Convertible on August 30, 2024 and sell it today you would earn a total of 63.00 from holding Fidelity Sai Convertible or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Sai Convertible vs. Franklin Natural Resources
Performance |
| Timeline |
| Fidelity Sai Convertible |
| Franklin Natural Res |
Fidelity Sai and Franklin Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Sai and Franklin Natural
The main advantage of trading using opposite Fidelity Sai and Franklin Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Sai position performs unexpectedly, Franklin Natural 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 Franklin Natural will offset losses from the drop in Franklin Natural's long position.| Fidelity Sai vs. Fidelity Freedom 2015 | Fidelity Sai vs. Fidelity Puritan Fund | Fidelity Sai vs. Fidelity Puritan Fund | Fidelity Sai vs. Fidelity Pennsylvania Municipal |
| Franklin Natural vs. Advent Claymore Convertible | Franklin Natural vs. Fidelity Sai Convertible | Franklin Natural vs. Lord Abbett Convertible | Franklin Natural vs. Gabelli Convertible And |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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