Correlation Between Fidelity Total and Frost Kempner
Can any of the company-specific risk be diversified away by investing in both Fidelity Total and Frost Kempner 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 Total and Frost Kempner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Total Bond and Frost Kempner Treasury, you can compare the effects of market volatilities on Fidelity Total and Frost Kempner 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 Total with a short position of Frost Kempner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Total and Frost Kempner.
Diversification Opportunities for Fidelity Total and Frost Kempner
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Frost is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Total Bond and Frost Kempner Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Kempner Treasury and Fidelity Total 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 Total Bond are associated (or correlated) with Frost Kempner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Kempner Treasury has no effect on the direction of Fidelity Total i.e., Fidelity Total and Frost Kempner go up and down completely randomly.
Pair Corralation between Fidelity Total and Frost Kempner
Assuming the 90 days horizon Fidelity Total is expected to generate 1.17 times less return on investment than Frost Kempner. In addition to that, Fidelity Total is 2.76 times more volatile than Frost Kempner Treasury. It trades about 0.09 of its total potential returns per unit of risk. Frost Kempner Treasury is currently generating about 0.29 per unit of volatility. If you would invest 841.00 in Frost Kempner Treasury on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Frost Kempner Treasury or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Total Bond vs. Frost Kempner Treasury
Performance |
| Timeline |
| Fidelity Total Bond |
| Frost Kempner Treasury |
Fidelity Total and Frost Kempner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Total and Frost Kempner
The main advantage of trading using opposite Fidelity Total and Frost Kempner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Total position performs unexpectedly, Frost Kempner 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 Frost Kempner will offset losses from the drop in Frost Kempner's long position.| Fidelity Total vs. Metropolitan West Total | Fidelity Total vs. Metropolitan West Total | Fidelity Total vs. Pimco Total Return | Fidelity Total vs. Total Return Fund |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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