Correlation Between Touchstone Large and Fidelity Managed
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Fidelity Managed 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 Touchstone Large and Fidelity Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Large Cap and Fidelity Managed Retirement, you can compare the effects of market volatilities on Touchstone Large and Fidelity Managed 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 Touchstone Large with a short position of Fidelity Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Fidelity Managed.
Diversification Opportunities for Touchstone Large and Fidelity Managed
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Touchstone and Fidelity is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Fidelity Managed Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Managed Ret and Touchstone Large 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 Touchstone Large Cap are associated (or correlated) with Fidelity Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Managed Ret has no effect on the direction of Touchstone Large i.e., Touchstone Large and Fidelity Managed go up and down completely randomly.
Pair Corralation between Touchstone Large and Fidelity Managed
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 2.25 times more return on investment than Fidelity Managed. However, Touchstone Large is 2.25 times more volatile than Fidelity Managed Retirement. It trades about 0.06 of its potential returns per unit of risk. Fidelity Managed Retirement is currently generating about 0.07 per unit of risk. If you would invest 1,540 in Touchstone Large Cap on September 25, 2024 and sell it today you would earn a total of 369.00 from holding Touchstone Large Cap or generate 23.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Fidelity Managed Retirement
Performance |
| Timeline |
| Touchstone Large Cap |
| Fidelity Managed Ret |
Touchstone Large and Fidelity Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Fidelity Managed
The main advantage of trading using opposite Touchstone Large and Fidelity Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Fidelity Managed 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 Managed will offset losses from the drop in Fidelity Managed's long position.| Touchstone Large vs. Touchstone Small Cap | Touchstone Large vs. Touchstone Sands Capital | Touchstone Large vs. Mid Cap Growth | Touchstone Large vs. Mid Cap Growth |
| Fidelity Managed vs. Fidelity Freedom 2010 | Fidelity Managed vs. Fidelity Freedom 2020 | Fidelity Managed vs. Fidelity Freedom 2030 | Fidelity Managed vs. Fidelity Freedom 2040 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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