Correlation Between Fidelity Sai and American Funds
Can any of the company-specific risk be diversified away by investing in both Fidelity Sai and American Funds 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 Sai and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Sai Treasury and American Funds Government, you can compare the effects of market volatilities on Fidelity Sai and American Funds 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 Sai with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sai and American Funds.
Diversification Opportunities for Fidelity Sai and American Funds
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and American is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai Treasury and American Funds Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Government and Fidelity Sai 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 Sai Treasury are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Government has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and American Funds go up and down completely randomly.
Pair Corralation between Fidelity Sai and American Funds
Assuming the 90 days horizon Fidelity Sai is expected to generate 1.19 times less return on investment than American Funds. But when comparing it to its historical volatility, Fidelity Sai Treasury is 1.01 times less risky than American Funds. It trades about 0.08 of its potential returns per unit of risk. American Funds Government is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,140 in American Funds Government on August 24, 2024 and sell it today you would earn a total of 42.00 from holding American Funds Government or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Sai Treasury vs. American Funds Government
Performance |
| Timeline |
| Fidelity Sai Treasury |
| American Funds Government |
Fidelity Sai and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Sai and American Funds
The main advantage of trading using opposite Fidelity Sai and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Sai position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Fidelity Sai vs. Allianzgi Convertible Income | Fidelity Sai vs. Fidelity Sai Convertible | Fidelity Sai vs. Rationalpier 88 Convertible | Fidelity Sai vs. Advent Claymore Convertible |
| American Funds vs. Vanguard Gnma Fund | American Funds vs. Us Government Securities | American Funds vs. Us Government Securities | American Funds vs. Us Government Securities |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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