Correlation Between NYSE Composite and Fidelity Asset
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Asset 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 Asset 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 Asset Manager, you can compare the effects of market volatilities on NYSE Composite and Fidelity Asset 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 Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Asset.
Diversification Opportunities for NYSE Composite and Fidelity Asset
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 Asset Manager in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Asset Manager 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 Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Asset Manager has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Asset go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Asset
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.02 times less return on investment than Fidelity Asset. In addition to that, NYSE Composite is 1.24 times more volatile than Fidelity Asset Manager. It trades about 0.08 of its total potential returns per unit of risk. Fidelity Asset Manager is currently generating about 0.1 per unit of volatility. If you would invest 2,225 in Fidelity Asset Manager on September 13, 2024 and sell it today you would earn a total of 702.00 from holding Fidelity Asset Manager or generate 31.55% 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 Asset Manager
Performance |
| Timeline |
NYSE Composite and Fidelity Asset Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Asset Manager
Pair trading matchups for Fidelity Asset
Pair Trading with NYSE Composite and Fidelity Asset
The main advantage of trading using opposite NYSE Composite and Fidelity Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Asset 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 Asset will offset losses from the drop in Fidelity Asset'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 Asset vs. Fidelity Asset Manager | Fidelity Asset vs. Fidelity Strategic Dividend | Fidelity Asset vs. Fidelity Advisor Emerging | Fidelity Asset vs. Fidelity Advisor Biotechnology |
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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