Correlation Between Lumia and Fidelity Disciplined
Can any of the company-specific risk be diversified away by investing in both Lumia and Fidelity Disciplined 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 Lumia and Fidelity Disciplined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and Fidelity Disciplined Equity, you can compare the effects of market volatilities on Lumia and Fidelity Disciplined 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 Lumia with a short position of Fidelity Disciplined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Fidelity Disciplined.
Diversification Opportunities for Lumia and Fidelity Disciplined
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lumia and Fidelity is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Fidelity Disciplined Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Disciplined and Lumia 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 Lumia are associated (or correlated) with Fidelity Disciplined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Disciplined has no effect on the direction of Lumia i.e., Lumia and Fidelity Disciplined go up and down completely randomly.
Pair Corralation between Lumia and Fidelity Disciplined
Assuming the 90 days trading horizon Lumia is expected to generate 60.56 times more return on investment than Fidelity Disciplined. However, Lumia is 60.56 times more volatile than Fidelity Disciplined Equity. It trades about 0.07 of its potential returns per unit of risk. Fidelity Disciplined Equity is currently generating about 0.03 per unit of risk. If you would invest 0.00 in Lumia on October 12, 2024 and sell it today you would earn a total of 117.00 from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.89% |
| Values | Daily Returns |
Lumia vs. Fidelity Disciplined Equity
Performance |
| Timeline |
| Lumia |
| Fidelity Disciplined |
Lumia and Fidelity Disciplined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Fidelity Disciplined
The main advantage of trading using opposite Lumia and Fidelity Disciplined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Fidelity Disciplined 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 Disciplined will offset losses from the drop in Fidelity Disciplined's long position.The idea behind Lumia and Fidelity Disciplined Equity 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 Disciplined vs. T Rowe Price | Fidelity Disciplined vs. Maryland Tax Free Bond | Fidelity Disciplined vs. Leader Short Term Bond | Fidelity Disciplined vs. Versatile Bond Portfolio |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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