Correlation Between NYSE Composite and Fidelity Flex
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Flex 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 Flex 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 Flex Freedom, you can compare the effects of market volatilities on NYSE Composite and Fidelity Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Flex.
Diversification Opportunities for NYSE Composite and Fidelity Flex
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Fidelity is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity Flex Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Freedom 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Flex Freedom has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Flex go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Flex
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.14 times more return on investment than Fidelity Flex. However, NYSE Composite is 1.14 times more volatile than Fidelity Flex Freedom. It trades about 0.13 of its potential returns per unit of risk. Fidelity Flex Freedom is currently generating about 0.12 per unit of risk. If you would invest 1,898,790 in NYSE Composite on September 12, 2024 and sell it today you would earn a total of 90,313 from holding NYSE Composite or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity Flex Freedom
Performance |
| Timeline |
NYSE Composite and Fidelity Flex Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Flex Freedom
Pair trading matchups for Fidelity Flex
Pair Trading with NYSE Composite and Fidelity Flex
The main advantage of trading using opposite NYSE Composite and Fidelity Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Flex 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 Flex will offset losses from the drop in Fidelity Flex's long position.| NYSE Composite vs. Boston Beer | NYSE Composite vs. Freedom Bank of | NYSE Composite vs. KeyCorp | NYSE Composite vs. LithiumBank Resources Corp |
| Fidelity Flex vs. Guidemark Smallmid Cap | Fidelity Flex vs. Sp Smallcap 600 | Fidelity Flex vs. Lebenthal Lisanti Small | Fidelity Flex vs. Touchstone 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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