Correlation Between Valic Company and Fidelity Capital
Can any of the company-specific risk be diversified away by investing in both Valic Company and Fidelity Capital 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 Valic Company and Fidelity Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Fidelity Capital Income, you can compare the effects of market volatilities on Valic Company and Fidelity Capital 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 Valic Company with a short position of Fidelity Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Fidelity Capital.
Diversification Opportunities for Valic Company and Fidelity Capital
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valic and Fidelity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Fidelity Capital Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Capital Income and Valic Company 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 Valic Company I are associated (or correlated) with Fidelity Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Capital Income has no effect on the direction of Valic Company i.e., Valic Company and Fidelity Capital go up and down completely randomly.
Pair Corralation between Valic Company and Fidelity Capital
Assuming the 90 days horizon Valic Company is expected to generate 1.24 times less return on investment than Fidelity Capital. But when comparing it to its historical volatility, Valic Company I is 1.08 times less risky than Fidelity Capital. It trades about 0.12 of its potential returns per unit of risk. Fidelity Capital Income is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 832.00 in Fidelity Capital Income on September 2, 2024 and sell it today you would earn a total of 205.00 from holding Fidelity Capital Income or generate 24.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Fidelity Capital Income
Performance |
| Timeline |
| Valic Company I |
| Fidelity Capital Income |
Valic Company and Fidelity Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Fidelity Capital
The main advantage of trading using opposite Valic Company and Fidelity Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Fidelity Capital 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 Capital will offset losses from the drop in Fidelity Capital's long position.| Valic Company vs. Mid Cap Index | Valic Company vs. Mid Cap Strategic | Valic Company vs. Stock Index Fund | Valic Company vs. Broad Cap Value |
| Fidelity Capital vs. Fidelity High Income | Fidelity Capital vs. Fidelity New Markets | Fidelity Capital vs. Fidelity Total Bond | Fidelity Capital vs. Fidelity Balanced Fund |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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