Correlation Between Fidelity Focused and Fidelity Trend
Can any of the company-specific risk be diversified away by investing in both Fidelity Focused and Fidelity Trend 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 Focused and Fidelity Trend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Focused Stock and Fidelity Trend Fund, you can compare the effects of market volatilities on Fidelity Focused and Fidelity Trend 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 Focused with a short position of Fidelity Trend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Focused and Fidelity Trend.
Diversification Opportunities for Fidelity Focused and Fidelity Trend
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Focused Stock and Fidelity Trend Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Trend and Fidelity Focused 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 Focused Stock are associated (or correlated) with Fidelity Trend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Trend has no effect on the direction of Fidelity Focused i.e., Fidelity Focused and Fidelity Trend go up and down completely randomly.
Pair Corralation between Fidelity Focused and Fidelity Trend
Assuming the 90 days horizon Fidelity Focused Stock is expected to generate 0.9 times more return on investment than Fidelity Trend. However, Fidelity Focused Stock is 1.12 times less risky than Fidelity Trend. It trades about 0.05 of its potential returns per unit of risk. Fidelity Trend Fund is currently generating about 0.04 per unit of risk. If you would invest 3,356 in Fidelity Focused Stock on November 3, 2024 and sell it today you would earn a total of 596.00 from holding Fidelity Focused Stock or generate 17.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Fidelity Focused Stock vs. Fidelity Trend Fund
Performance |
| Timeline |
| Fidelity Focused Stock |
| Fidelity Trend |
Fidelity Focused and Fidelity Trend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Focused and Fidelity Trend
The main advantage of trading using opposite Fidelity Focused and Fidelity Trend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Focused position performs unexpectedly, Fidelity Trend 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 Fidelity Trend will offset losses from the drop in Fidelity Trend's long position.| Fidelity Focused vs. Fidelity Trend Fund | Fidelity Focused vs. Fidelity Large Cap | Fidelity Focused vs. Fidelity Growth Discovery | Fidelity Focused vs. Fidelity Mega Cap |
| Fidelity Trend vs. Fidelity Stock Selector | Fidelity Trend vs. Fidelity Focused Stock | Fidelity Trend vs. Fidelity Disciplined Equity | Fidelity Trend vs. Fidelity Stock Selector |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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