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 Blue, 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
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Fidelity is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity Series Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Blue 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 Blue 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 3.15 times less return on investment than Fidelity Series. But when comparing it to its historical volatility, NYSE Composite is 1.75 times less risky than Fidelity Series. It trades about 0.13 of its potential returns per unit of risk. Fidelity Series Blue is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,759 in Fidelity Series Blue on September 12, 2024 and sell it today you would earn a total of 272.00 from holding Fidelity Series Blue or generate 15.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity Series Blue
Performance |
| Timeline |
NYSE Composite and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Series Blue
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. Boston Beer | NYSE Composite vs. Freedom Bank of | NYSE Composite vs. KeyCorp | NYSE Composite vs. LithiumBank Resources Corp |
| Fidelity Series vs. Putnam Convertible Incm Gwth | Fidelity Series vs. Advent Claymore Convertible | Fidelity Series vs. Gabelli Convertible And | Fidelity Series vs. Virtus Convertible |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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