Correlation Between Fidelity Sustainable and Indutrade
Can any of the company-specific risk be diversified away by investing in both Fidelity Sustainable and Indutrade 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 Sustainable and Indutrade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Sustainable USD and Indutrade AB, you can compare the effects of market volatilities on Fidelity Sustainable and Indutrade 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 Sustainable with a short position of Indutrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sustainable and Indutrade.
Diversification Opportunities for Fidelity Sustainable and Indutrade
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Indutrade is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sustainable USD and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade AB and Fidelity Sustainable 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 Sustainable USD are associated (or correlated) with Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Fidelity Sustainable i.e., Fidelity Sustainable and Indutrade go up and down completely randomly.
Pair Corralation between Fidelity Sustainable and Indutrade
Assuming the 90 days trading horizon Fidelity Sustainable is expected to generate 2.9 times less return on investment than Indutrade. But when comparing it to its historical volatility, Fidelity Sustainable USD is 3.82 times less risky than Indutrade. It trades about 0.06 of its potential returns per unit of risk. Indutrade AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 20,513 in Indutrade AB on September 12, 2024 and sell it today you would earn a total of 7,997 from holding Indutrade AB or generate 38.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fidelity Sustainable USD vs. Indutrade AB
Performance |
| Timeline |
| Fidelity Sustainable USD |
| Indutrade AB |
Fidelity Sustainable and Indutrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Sustainable and Indutrade
The main advantage of trading using opposite Fidelity Sustainable and Indutrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Sustainable position performs unexpectedly, Indutrade 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 Indutrade will offset losses from the drop in Indutrade's long position.| Fidelity Sustainable vs. GraniteShares 3x Short | Fidelity Sustainable vs. WisdomTree Natural Gas | Fidelity Sustainable vs. Leverage Shares 3x | Fidelity Sustainable vs. WisdomTree Natural Gas |
| Indutrade vs. Hong Kong Land | Indutrade vs. Neometals | Indutrade vs. Coor Service Management | Indutrade vs. Fidelity Sustainable USD |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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