Correlation Between Microsoft and Fidelity Mid
Can any of the company-specific risk be diversified away by investing in both Microsoft and Fidelity Mid 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 Microsoft and Fidelity Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Fidelity Mid Cap, you can compare the effects of market volatilities on Microsoft and Fidelity Mid 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 Microsoft with a short position of Fidelity Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Fidelity Mid.
Diversification Opportunities for Microsoft and Fidelity Mid
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and Fidelity is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Fidelity Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Mid Cap and Microsoft 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 Microsoft are associated (or correlated) with Fidelity Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Mid Cap has no effect on the direction of Microsoft i.e., Microsoft and Fidelity Mid go up and down completely randomly.
Pair Corralation between Microsoft and Fidelity Mid
Given the investment horizon of 90 days Microsoft is expected to under-perform the Fidelity Mid. In addition to that, Microsoft is 1.93 times more volatile than Fidelity Mid Cap. It trades about -0.04 of its total potential returns per unit of risk. Fidelity Mid Cap is currently generating about 0.32 per unit of volatility. If you would invest 2,791 in Fidelity Mid Cap on August 28, 2024 and sell it today you would earn a total of 167.00 from holding Fidelity Mid Cap or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Microsoft vs. Fidelity Mid Cap
Performance |
| Timeline |
| Microsoft |
| Fidelity Mid Cap |
Microsoft and Fidelity Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Fidelity Mid
The main advantage of trading using opposite Microsoft and Fidelity Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Fidelity Mid 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 Mid will offset losses from the drop in Fidelity Mid's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Fidelity Mid vs. Fidelity Small Cap | Fidelity Mid vs. Fidelity Large Cap | Fidelity Mid vs. Fidelity Mid Cap | Fidelity Mid vs. Fidelity Small Cap |
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 CEOs Directory module to screen CEOs from public companies around the world.
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