Correlation Between NYSE Composite and Fidelity Sustainability
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Sustainability 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 Sustainability 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 Sustainability Bond, you can compare the effects of market volatilities on NYSE Composite and Fidelity Sustainability 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 Sustainability. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Sustainability.
Diversification Opportunities for NYSE Composite and Fidelity Sustainability
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Fidelity is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity Sustainability Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sustainability 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 Sustainability. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sustainability has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Sustainability go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Sustainability
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.76 times more return on investment than Fidelity Sustainability. However, NYSE Composite is 1.76 times more volatile than Fidelity Sustainability Bond. It trades about 0.11 of its potential returns per unit of risk. Fidelity Sustainability Bond is currently generating about 0.02 per unit of risk. If you would invest 1,511,767 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 500,578 from holding NYSE Composite or generate 33.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity Sustainability Bond
Performance |
| Timeline |
NYSE Composite and Fidelity Sustainability Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Sustainability Bond
Pair trading matchups for Fidelity Sustainability
Pair Trading with NYSE Composite and Fidelity Sustainability
The main advantage of trading using opposite NYSE Composite and Fidelity Sustainability positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Sustainability 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 Sustainability will offset losses from the drop in Fidelity Sustainability's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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