Correlation Between Fidelity Asset and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Fidelity Asset and Strategic Asset 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 Asset and Strategic Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Asset Manager and Strategic Asset Management, you can compare the effects of market volatilities on Fidelity Asset and Strategic Asset 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 Asset with a short position of Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Asset and Strategic Asset.
Diversification Opportunities for Fidelity Asset and Strategic Asset
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Strategic is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Asset Manager and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana and Fidelity Asset 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 Asset Manager are associated (or correlated) with Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Fidelity Asset i.e., Fidelity Asset and Strategic Asset go up and down completely randomly.
Pair Corralation between Fidelity Asset and Strategic Asset
Assuming the 90 days horizon Fidelity Asset is expected to generate 1.42 times less return on investment than Strategic Asset. But when comparing it to its historical volatility, Fidelity Asset Manager is 1.17 times less risky than Strategic Asset. It trades about 0.06 of its potential returns per unit of risk. Strategic Asset Management is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,063 in Strategic Asset Management on August 24, 2024 and sell it today you would earn a total of 154.00 from holding Strategic Asset Management or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Asset Manager vs. Strategic Asset Management
Performance |
| Timeline |
| Fidelity Asset Manager |
| Strategic Asset Mana |
Fidelity Asset and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Asset and Strategic Asset
The main advantage of trading using opposite Fidelity Asset and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Asset position performs unexpectedly, Strategic Asset 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 Strategic Asset will offset losses from the drop in Strategic Asset's long position.| Fidelity Asset vs. Blackrock Financial Institutions | Fidelity Asset vs. Royce Global Financial | Fidelity Asset vs. John Hancock Financial | Fidelity Asset vs. 1919 Financial Services |
| Strategic Asset vs. Fidelity Asset Manager | Strategic Asset vs. Fidelity Asset Manager | Strategic Asset vs. Fidelity Asset Manager | Strategic Asset vs. Fidelity Asset Manager |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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