Correlation Between Fidelity Select and Invesco Energy
Can any of the company-specific risk be diversified away by investing in both Fidelity Select and Invesco Energy 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 Select and Invesco Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Select Portfolios and Invesco Energy Fund, you can compare the effects of market volatilities on Fidelity Select and Invesco Energy 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 Select with a short position of Invesco Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Select and Invesco Energy.
Diversification Opportunities for Fidelity Select and Invesco Energy
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Fidelity and Invesco is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Select Portfolios and Invesco Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Energy and Fidelity Select 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 Select Portfolios are associated (or correlated) with Invesco Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Energy has no effect on the direction of Fidelity Select i.e., Fidelity Select and Invesco Energy go up and down completely randomly.
Pair Corralation between Fidelity Select and Invesco Energy
Assuming the 90 days horizon Fidelity Select Portfolios is expected to generate 1.07 times more return on investment than Invesco Energy. However, Fidelity Select is 1.07 times more volatile than Invesco Energy Fund. It trades about 0.6 of its potential returns per unit of risk. Invesco Energy Fund is currently generating about 0.6 per unit of risk. If you would invest 5,586 in Fidelity Select Portfolios on October 25, 2024 and sell it today you would earn a total of 478.00 from holding Fidelity Select Portfolios or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Select Portfolios vs. Invesco Energy Fund
Performance |
| Timeline |
| Fidelity Select Port |
| Invesco Energy |
Fidelity Select and Invesco Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Select and Invesco Energy
The main advantage of trading using opposite Fidelity Select and Invesco Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Select position performs unexpectedly, Invesco Energy 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 Invesco Energy will offset losses from the drop in Invesco Energy's long position.| Fidelity Select vs. Fidelity Natural Resources | Fidelity Select vs. Gold Portfolio Gold | Fidelity Select vs. Health Care Services | Fidelity Select vs. Materials Portfolio Materials |
| Invesco Energy vs. Vanguard Energy Fund | Invesco Energy vs. Vanguard Energy Fund | Invesco Energy vs. Vanguard Energy Index | Invesco Energy vs. Fidelity Select Portfolios |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |