Correlation Between Fidelity Strategic and Fidelity Stock
Can any of the company-specific risk be diversified away by investing in both Fidelity Strategic and Fidelity Stock 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 Strategic and Fidelity Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Strategic Dividend and Fidelity Stock Selector, you can compare the effects of market volatilities on Fidelity Strategic and Fidelity Stock 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 Strategic with a short position of Fidelity Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Strategic and Fidelity Stock.
Diversification Opportunities for Fidelity Strategic and Fidelity Stock
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Strategic Dividend and Fidelity Stock Selector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Stock Selector and Fidelity Strategic 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 Strategic Dividend are associated (or correlated) with Fidelity Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Stock Selector has no effect on the direction of Fidelity Strategic i.e., Fidelity Strategic and Fidelity Stock go up and down completely randomly.
Pair Corralation between Fidelity Strategic and Fidelity Stock
Assuming the 90 days horizon Fidelity Strategic Dividend is expected to generate 0.84 times more return on investment than Fidelity Stock. However, Fidelity Strategic Dividend is 1.19 times less risky than Fidelity Stock. It trades about -0.02 of its potential returns per unit of risk. Fidelity Stock Selector is currently generating about -0.06 per unit of risk. If you would invest 1,791 in Fidelity Strategic Dividend on September 14, 2024 and sell it today you would lose (4.00) from holding Fidelity Strategic Dividend or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Strategic Dividend vs. Fidelity Stock Selector
Performance |
| Timeline |
| Fidelity Strategic |
| Fidelity Stock Selector |
Fidelity Strategic and Fidelity Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Strategic and Fidelity Stock
The main advantage of trading using opposite Fidelity Strategic and Fidelity Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Strategic position performs unexpectedly, Fidelity Stock 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 Fidelity Stock will offset losses from the drop in Fidelity Stock's long position.| Fidelity Strategic vs. Fidelity Strategic Dividend | Fidelity Strategic vs. Fidelity Advisor Balanced | Fidelity Strategic vs. Fidelity Advisor New | Fidelity Strategic vs. Fidelity Small Cap |
| Fidelity Stock vs. Fidelity New Markets | Fidelity Stock vs. Fidelity New Markets | Fidelity Stock vs. Fidelity Advisor Sustainable | Fidelity Stock vs. Fidelity New Markets |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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