Correlation Between Fidelity Tactical and Capital Group
Can any of the company-specific risk be diversified away by investing in both Fidelity Tactical and Capital Group 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 Tactical and Capital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Tactical High and Capital Group Global, you can compare the effects of market volatilities on Fidelity Tactical and Capital Group 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 Tactical with a short position of Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Tactical and Capital Group.
Diversification Opportunities for Fidelity Tactical and Capital Group
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Capital is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Tactical High and Capital Group Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Global and Fidelity Tactical 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 Tactical High are associated (or correlated) with Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Global has no effect on the direction of Fidelity Tactical i.e., Fidelity Tactical and Capital Group go up and down completely randomly.
Pair Corralation between Fidelity Tactical and Capital Group
Assuming the 90 days trading horizon Fidelity Tactical is expected to generate 1.1 times less return on investment than Capital Group. But when comparing it to its historical volatility, Fidelity Tactical High is 1.09 times less risky than Capital Group. It trades about 0.12 of its potential returns per unit of risk. Capital Group Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,518 in Capital Group Global on September 2, 2024 and sell it today you would earn a total of 1,575 from holding Capital Group Global or generate 34.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 36.71% |
| Values | Daily Returns |
Fidelity Tactical High vs. Capital Group Global
Performance |
| Timeline |
| Fidelity Tactical High |
| Capital Group Global |
Fidelity Tactical and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Tactical and Capital Group
The main advantage of trading using opposite Fidelity Tactical and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Tactical position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group's long position.| Fidelity Tactical vs. RBC Select Balanced | Fidelity Tactical vs. RBC Portefeuille de | Fidelity Tactical vs. Edgepoint Global Portfolio | Fidelity Tactical vs. TD Comfort Balanced |
| Capital Group vs. Mawer Global Small | Capital Group vs. BMO Concentrated Global | Capital Group vs. CI Global Resource | Capital Group vs. Edgepoint Global Growth |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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