Correlation Between Visa and Fidelity Contrafund
Can any of the company-specific risk be diversified away by investing in both Visa and Fidelity Contrafund 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 Visa and Fidelity Contrafund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Fidelity Contrafund, you can compare the effects of market volatilities on Visa and Fidelity Contrafund 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 Visa with a short position of Fidelity Contrafund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Fidelity Contrafund.
Diversification Opportunities for Visa and Fidelity Contrafund
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and Fidelity is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Fidelity Contrafund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Contrafund and Visa 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 Visa Class A are associated (or correlated) with Fidelity Contrafund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Contrafund has no effect on the direction of Visa i.e., Visa and Fidelity Contrafund go up and down completely randomly.
Pair Corralation between Visa and Fidelity Contrafund
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.24 times more return on investment than Fidelity Contrafund. However, Visa is 1.24 times more volatile than Fidelity Contrafund. It trades about 0.36 of its potential returns per unit of risk. Fidelity Contrafund is currently generating about 0.07 per unit of risk. If you would invest 28,365 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 2,954 from holding Visa Class A or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. Fidelity Contrafund
Performance |
| Timeline |
| Visa Class A |
| Fidelity Contrafund |
Visa and Fidelity Contrafund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Fidelity Contrafund
The main advantage of trading using opposite Visa and Fidelity Contrafund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Fidelity Contrafund 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 Contrafund will offset losses from the drop in Fidelity Contrafund's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Fidelity Contrafund vs. Fidelity Low Priced Stock | Fidelity Contrafund vs. Fidelity Growth Pany | Fidelity Contrafund vs. Fidelity Magellan Fund | Fidelity Contrafund vs. Fidelity Diversified International |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |