Correlation Between Fidelity Extended and Johnson Opportunity
Can any of the company-specific risk be diversified away by investing in both Fidelity Extended and Johnson Opportunity 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 Johnson Opportunity 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 Johnson Opportunity S, you can compare the effects of market volatilities on Fidelity Extended and Johnson Opportunity 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 Johnson Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Extended and Johnson Opportunity.
Diversification Opportunities for Fidelity Extended and Johnson Opportunity
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and Johnson is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Extended Market and Johnson Opportunity S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Opportunity 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 Johnson Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Opportunity has no effect on the direction of Fidelity Extended i.e., Fidelity Extended and Johnson Opportunity go up and down completely randomly.
Pair Corralation between Fidelity Extended and Johnson Opportunity
Assuming the 90 days horizon Fidelity Extended Market is expected to under-perform the Johnson Opportunity. In addition to that, Fidelity Extended is 1.41 times more volatile than Johnson Opportunity S. It trades about -0.22 of its total potential returns per unit of risk. Johnson Opportunity S is currently generating about -0.23 per unit of volatility. If you would invest 5,399 in Johnson Opportunity S on November 28, 2024 and sell it today you would lose (193.00) from holding Johnson Opportunity S or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Extended Market vs. Johnson Opportunity S
Performance |
| Timeline |
| Fidelity Extended Market |
| Johnson Opportunity |
Fidelity Extended and Johnson Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Extended and Johnson Opportunity
The main advantage of trading using opposite Fidelity Extended and Johnson Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Extended position performs unexpectedly, Johnson Opportunity 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 Johnson Opportunity will offset losses from the drop in Johnson Opportunity'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 |
| Johnson Opportunity vs. Johnson Core Plus | Johnson Opportunity vs. Johnson Enhanced Return | Johnson Opportunity vs. Johnson Equity Income | Johnson Opportunity vs. Johnson Equity Income |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |