Correlation Between NYSE Composite and Fidelity Mid
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Fidelity Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Fidelity Mid Cap, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Fidelity Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Mid.
Diversification Opportunities for NYSE Composite and Fidelity Mid
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Fidelity is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Fidelity Mid go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Mid
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.9 times more return on investment than Fidelity Mid. However, NYSE Composite is 1.12 times less risky than Fidelity Mid. It trades about 0.32 of its potential returns per unit of risk. Fidelity Mid Cap is currently generating about 0.28 per unit of risk. If you would invest 1,909,542 in NYSE Composite on November 3, 2024 and sell it today you would earn a total of 90,340 from holding NYSE Composite or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity Mid Cap
Performance |
| Timeline |
NYSE Composite and Fidelity Mid Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Mid Cap
Pair trading matchups for Fidelity Mid
Pair Trading with NYSE Composite and Fidelity Mid
The main advantage of trading using opposite NYSE Composite and Fidelity Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Arrow Electronics | NYSE Composite vs. Cirmaker Technology | NYSE Composite vs. Zhihu Inc ADR | NYSE Composite vs. Weibo Corp |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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