Correlation Between Fidelity Strategic and Growth Allocation
Can any of the company-specific risk be diversified away by investing in both Fidelity Strategic and Growth Allocation 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 Strategic and Growth Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Strategic Dividend and Growth Allocation Index, you can compare the effects of market volatilities on Fidelity Strategic and Growth Allocation 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 Strategic with a short position of Growth Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Strategic and Growth Allocation.
Diversification Opportunities for Fidelity Strategic and Growth Allocation
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Growth is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Strategic Dividend and Growth Allocation Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Allocation Index and Fidelity Strategic 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 Strategic Dividend are associated (or correlated) with Growth Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Allocation Index has no effect on the direction of Fidelity Strategic i.e., Fidelity Strategic and Growth Allocation go up and down completely randomly.
Pair Corralation between Fidelity Strategic and Growth Allocation
Assuming the 90 days horizon Fidelity Strategic Dividend is expected to under-perform the Growth Allocation. In addition to that, Fidelity Strategic is 1.24 times more volatile than Growth Allocation Index. It trades about -0.03 of its total potential returns per unit of risk. Growth Allocation Index is currently generating about 0.28 per unit of volatility. If you would invest 1,121 in Growth Allocation Index on September 14, 2024 and sell it today you would earn a total of 22.00 from holding Growth Allocation Index or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Strategic Dividend vs. Growth Allocation Index
Performance |
| Timeline |
| Fidelity Strategic |
| Growth Allocation Index |
Fidelity Strategic and Growth Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Strategic and Growth Allocation
The main advantage of trading using opposite Fidelity Strategic and Growth Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Strategic position performs unexpectedly, Growth Allocation 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 Growth Allocation will offset losses from the drop in Growth Allocation's long position.| Fidelity Strategic vs. Fidelity Advisor New | Fidelity Strategic vs. Fidelity Advisor Mid | Fidelity Strategic vs. Fidelity Advisor Strategic | Fidelity Strategic vs. Fidelity Total Bond |
| Growth Allocation vs. Fidelity Asset Manager | Growth Allocation vs. Fidelity Strategic Dividend | Growth Allocation vs. Fidelity Advisor Emerging | Growth Allocation vs. Fidelity Advisor Biotechnology |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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