Correlation Between Fidelity Extended and Amg River
Can any of the company-specific risk be diversified away by investing in both Fidelity Extended and Amg River 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 Extended and Amg River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Extended Market and Amg River Road, you can compare the effects of market volatilities on Fidelity Extended and Amg River 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 Extended with a short position of Amg River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Extended and Amg River.
Diversification Opportunities for Fidelity Extended and Amg River
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Amg is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Extended Market and Amg River Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg River Road and Fidelity Extended 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 Extended Market are associated (or correlated) with Amg River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg River Road has no effect on the direction of Fidelity Extended i.e., Fidelity Extended and Amg River go up and down completely randomly.
Pair Corralation between Fidelity Extended and Amg River
Assuming the 90 days horizon Fidelity Extended Market is expected to generate 1.65 times more return on investment than Amg River. However, Fidelity Extended is 1.65 times more volatile than Amg River Road. It trades about 0.25 of its potential returns per unit of risk. Amg River Road is currently generating about 0.2 per unit of risk. If you would invest 8,785 in Fidelity Extended Market on August 24, 2024 and sell it today you would earn a total of 638.00 from holding Fidelity Extended Market or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Extended Market vs. Amg River Road
Performance |
| Timeline |
| Fidelity Extended Market |
| Amg River Road |
Fidelity Extended and Amg River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Extended and Amg River
The main advantage of trading using opposite Fidelity Extended and Amg River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Extended position performs unexpectedly, Amg River 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 Amg River will offset losses from the drop in Amg River's long position.| Fidelity Extended vs. Fidelity International Index | Fidelity Extended vs. Fidelity 500 Index | Fidelity Extended vs. Fidelity Bond Index | Fidelity Extended vs. Fidelity Total Market |
| Amg River vs. Amg Managers Doubleline | Amg River vs. Amg Frontier Small | Amg River vs. Amg Frontier Small | Amg River vs. Amg Frontier Small |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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