Correlation Between Fidelity Sai and Pimco Preferred
Can any of the company-specific risk be diversified away by investing in both Fidelity Sai and Pimco Preferred 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 Pimco Preferred 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 Pimco Preferred And, you can compare the effects of market volatilities on Fidelity Sai and Pimco Preferred 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 Pimco Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sai and Pimco Preferred.
Diversification Opportunities for Fidelity Sai and Pimco Preferred
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Pimco is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai Convertible and Pimco Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Preferred And 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 Pimco Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Preferred And has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and Pimco Preferred go up and down completely randomly.
Pair Corralation between Fidelity Sai and Pimco Preferred
Assuming the 90 days horizon Fidelity Sai is expected to generate 1.34 times less return on investment than Pimco Preferred. But when comparing it to its historical volatility, Fidelity Sai Convertible is 1.75 times less risky than Pimco Preferred. It trades about 0.24 of its potential returns per unit of risk. Pimco Preferred And is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 749.00 in Pimco Preferred And on December 12, 2024 and sell it today you would earn a total of 182.00 from holding Pimco Preferred And or generate 24.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 76.06% |
| Values | Daily Returns |
Fidelity Sai Convertible vs. Pimco Preferred And
Performance |
| Timeline |
| Fidelity Sai Convertible |
| Pimco Preferred And |
Fidelity Sai and Pimco Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Sai and Pimco Preferred
The main advantage of trading using opposite Fidelity Sai and Pimco Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Sai position performs unexpectedly, Pimco Preferred 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 Pimco Preferred will offset losses from the drop in Pimco Preferred's long position.| Fidelity Sai vs. Aqr Risk Parity | ||
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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