Correlation Between NYSE Composite and Fidelity Flex
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Flex 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 Flex 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 Flex Freedom, you can compare the effects of market volatilities on NYSE Composite and Fidelity Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Flex.
Diversification Opportunities for NYSE Composite and Fidelity Flex
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 Flex Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Freedom 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Flex Freedom has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Flex go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Flex
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.12 times less return on investment than Fidelity Flex. But when comparing it to its historical volatility, NYSE Composite is 1.01 times less risky than Fidelity Flex. It trades about 0.08 of its potential returns per unit of risk. Fidelity Flex Freedom is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,004 in Fidelity Flex Freedom on November 27, 2024 and sell it today you would earn a total of 329.00 from holding Fidelity Flex Freedom or generate 32.77% 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 Flex Freedom
Performance |
| Timeline |
NYSE Composite and Fidelity Flex Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Flex Freedom
Pair trading matchups for Fidelity Flex
Pair Trading with NYSE Composite and Fidelity Flex
The main advantage of trading using opposite NYSE Composite and Fidelity Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Flex 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 Flex will offset losses from the drop in Fidelity Flex's long position.| NYSE Composite vs. Unum Group | NYSE Composite vs. Palomar Holdings | NYSE Composite vs. Fidelity National Financial | NYSE Composite vs. ZW Data Action |
| Fidelity Flex vs. Legg Mason Partners | Fidelity Flex vs. Ab Small Cap | Fidelity Flex vs. Nuveen Small Cap | Fidelity Flex vs. Needham Small Cap |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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