Correlation Between Multimanager Lifestyle and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both Multimanager Lifestyle and Fidelity Series 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 Multimanager Lifestyle and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multimanager Lifestyle Moderate and Fidelity Series 1000, you can compare the effects of market volatilities on Multimanager Lifestyle and Fidelity Series 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 Multimanager Lifestyle with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimanager Lifestyle and Fidelity Series.
Diversification Opportunities for Multimanager Lifestyle and Fidelity Series
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Multimanager and Fidelity is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Moderat and Fidelity Series 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series 1000 and Multimanager Lifestyle 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 Multimanager Lifestyle Moderate are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series 1000 has no effect on the direction of Multimanager Lifestyle i.e., Multimanager Lifestyle and Fidelity Series go up and down completely randomly.
Pair Corralation between Multimanager Lifestyle and Fidelity Series
Assuming the 90 days horizon Multimanager Lifestyle is expected to generate 3.27 times less return on investment than Fidelity Series. But when comparing it to its historical volatility, Multimanager Lifestyle Moderate is 2.13 times less risky than Fidelity Series. It trades about 0.12 of its potential returns per unit of risk. Fidelity Series 1000 is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,670 in Fidelity Series 1000 on September 3, 2024 and sell it today you would earn a total of 134.00 from holding Fidelity Series 1000 or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multimanager Lifestyle Moderat vs. Fidelity Series 1000
Performance |
| Timeline |
| Multimanager Lifestyle |
| Fidelity Series 1000 |
Multimanager Lifestyle and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multimanager Lifestyle and Fidelity Series
The main advantage of trading using opposite Multimanager Lifestyle and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimanager Lifestyle position performs unexpectedly, Fidelity Series 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 Series will offset losses from the drop in Fidelity Series' long position.| Multimanager Lifestyle vs. Fidelity Series 1000 | Multimanager Lifestyle vs. Dodge Cox Stock | Multimanager Lifestyle vs. Jhancock Disciplined Value | Multimanager Lifestyle vs. Fundamental Large Cap |
| Fidelity Series vs. John Hancock Funds | Fidelity Series vs. T Rowe Price | Fidelity Series vs. T Rowe Price | Fidelity Series vs. Hood River New |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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