Correlation Between GM and Fidelity Sai
Can any of the company-specific risk be diversified away by investing in both GM and Fidelity Sai 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 GM and Fidelity Sai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Fidelity Sai Quality, you can compare the effects of market volatilities on GM and Fidelity Sai 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 GM with a short position of Fidelity Sai. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Fidelity Sai.
Diversification Opportunities for GM and Fidelity Sai
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Fidelity is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Fidelity Sai Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Quality and GM 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 General Motors are associated (or correlated) with Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Quality has no effect on the direction of GM i.e., GM and Fidelity Sai go up and down completely randomly.
Pair Corralation between GM and Fidelity Sai
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.3 times more return on investment than Fidelity Sai. However, GM is 2.3 times more volatile than Fidelity Sai Quality. It trades about 0.31 of its potential returns per unit of risk. Fidelity Sai Quality is currently generating about 0.11 per unit of risk. If you would invest 5,273 in General Motors on August 28, 2024 and sell it today you would earn a total of 747.00 from holding General Motors or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Fidelity Sai Quality
Performance |
| Timeline |
| General Motors |
| Fidelity Sai Quality |
GM and Fidelity Sai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Fidelity Sai
The main advantage of trading using opposite GM and Fidelity Sai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Fidelity Sai 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 Sai will offset losses from the drop in Fidelity Sai's long position.The idea behind General Motors and Fidelity Sai Quality pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Fidelity Sai vs. Lord Abbett Growth | Fidelity Sai vs. Fidelity Advisor Growth | Fidelity Sai vs. Aquagold International | Fidelity Sai vs. Morningstar Unconstrained Allocation |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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