Correlation Between NYSE Composite and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Series 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 Series 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 Series All Sector, you can compare the effects of market volatilities on NYSE Composite and Fidelity Series 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 Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Series.
Diversification Opportunities for NYSE Composite and Fidelity Series
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and FIDELITY is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity Series All Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series All 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 Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series All has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Series go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Series
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.17 times less return on investment than Fidelity Series. But when comparing it to its historical volatility, NYSE Composite is 1.27 times less risky than Fidelity Series. It trades about 0.42 of its potential returns per unit of risk. Fidelity Series All Sector is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1,284 in Fidelity Series All Sector on September 1, 2024 and sell it today you would earn a total of 85.00 from holding Fidelity Series All Sector or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity Series All Sector
Performance |
| Timeline |
NYSE Composite and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Series All Sector
Pair trading matchups for Fidelity Series
Pair Trading with NYSE Composite and Fidelity Series
The main advantage of trading using opposite NYSE Composite and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Series 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 Series will offset losses from the drop in Fidelity Series' long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Fidelity Series vs. Fidelity Focused Stock | Fidelity Series vs. Fidelity Stock Selector | Fidelity Series vs. Fidelity Trend Fund | Fidelity Series vs. Fidelity Advisor Value |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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