Correlation Between American Funds and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2050 and Fidelity Series Government, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Fidelity Series.
Diversification Opportunities for American Funds and Fidelity Series
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Fidelity is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2050 and Fidelity Series Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Gove and American Funds 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 American Funds 2050 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 Gove has no effect on the direction of American Funds i.e., American Funds and Fidelity Series go up and down completely randomly.
Pair Corralation between American Funds and Fidelity Series
Assuming the 90 days horizon American Funds 2050 is expected to under-perform the Fidelity Series. In addition to that, American Funds is 1.89 times more volatile than Fidelity Series Government. It trades about -0.01 of its total potential returns per unit of risk. Fidelity Series Government is currently generating about 0.16 per unit of volatility. If you would invest 911.00 in Fidelity Series Government on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Fidelity Series Government or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2050 vs. Fidelity Series Government
Performance |
| Timeline |
| American Funds 2050 |
| Fidelity Series Gove |
American Funds and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Fidelity Series
The main advantage of trading using opposite American Funds and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Payden Government Fund | American Funds vs. Hsbc Government Money | American Funds vs. Dunham Porategovernment Bond | American Funds vs. Dreyfus Government Cash |
| Fidelity Series vs. Vanguard Gnma Fund | Fidelity Series vs. Vanguard Intermediate Term Government | Fidelity Series vs. Us Government Securities | Fidelity Series vs. Us Government Securities |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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