Correlation Between NYSE Composite and Fidelity Intermediate
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Intermediate 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 Intermediate 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 Intermediate Bond, you can compare the effects of market volatilities on NYSE Composite and Fidelity Intermediate 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 Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Intermediate.
Diversification Opportunities for NYSE Composite and Fidelity Intermediate
-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 Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Intermediate 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 Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Intermediate has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Intermediate go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Intermediate
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.06 times more return on investment than Fidelity Intermediate. However, NYSE Composite is 3.06 times more volatile than Fidelity Intermediate Bond. It trades about 0.43 of its potential returns per unit of risk. Fidelity Intermediate Bond is currently generating about 0.1 per unit of risk. If you would invest 1,924,339 in NYSE Composite on September 3, 2024 and sell it today you would earn a total of 102,865 from holding NYSE Composite or generate 5.35% 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 Intermediate Bond
Performance |
| Timeline |
NYSE Composite and Fidelity Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Intermediate Bond
Pair trading matchups for Fidelity Intermediate
Pair Trading with NYSE Composite and Fidelity Intermediate
The main advantage of trading using opposite NYSE Composite and Fidelity Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Intermediate 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 Intermediate will offset losses from the drop in Fidelity Intermediate's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |