Correlation Between NYSE Composite and Fidelity Sustainable
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Sustainable 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 Sustainable 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 Sustainable High, you can compare the effects of market volatilities on NYSE Composite and Fidelity Sustainable 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 Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Sustainable.
Diversification Opportunities for NYSE Composite and Fidelity Sustainable
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Fidelity is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity Sustainable High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sustainable High 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 Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sustainable High has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Sustainable go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Sustainable
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.25 times more return on investment than Fidelity Sustainable. However, NYSE Composite is 3.25 times more volatile than Fidelity Sustainable High. It trades about 0.24 of its potential returns per unit of risk. Fidelity Sustainable High is currently generating about 0.18 per unit of risk. If you would invest 1,945,627 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 66,718 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity Sustainable High
Performance |
| Timeline |
NYSE Composite and Fidelity Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Sustainable High
Pair trading matchups for Fidelity Sustainable
Pair Trading with NYSE Composite and Fidelity Sustainable
The main advantage of trading using opposite NYSE Composite and Fidelity Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Sustainable 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 Sustainable will offset losses from the drop in Fidelity Sustainable'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 |
| Fidelity Sustainable vs. First Trust Senior | Fidelity Sustainable vs. First Trust Low | Fidelity Sustainable vs. First Trust Enhanced | Fidelity Sustainable vs. First Trust TCW |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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