Correlation Between Tangerine Balanced and Fidelity ClearPath

Can any of the company-specific risk be diversified away by investing in both Tangerine Balanced and Fidelity ClearPath 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 Tangerine Balanced and Fidelity ClearPath into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tangerine Balanced Growth and Fidelity ClearPath 2045, you can compare the effects of market volatilities on Tangerine Balanced and Fidelity ClearPath 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 Tangerine Balanced with a short position of Fidelity ClearPath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tangerine Balanced and Fidelity ClearPath.

Diversification Opportunities for Tangerine Balanced and Fidelity ClearPath

0.71

Correlation Coefficient

Tangerine Balanced  Fidelity ClearPath

Poor diversification

The 3 months correlation between Tangerine and Fidelity is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Tangerine Balanced Growth and Fidelity ClearPath 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity ClearPath 2045 and Tangerine Balanced 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 Tangerine Balanced Growth are associated (or correlated) with Fidelity ClearPath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity ClearPath 2045 has no effect on the direction of Tangerine Balanced i.e., Tangerine Balanced and Fidelity ClearPath go up and down completely randomly.

Pair Corralation between Tangerine Balanced and Fidelity ClearPath

Assuming the 90 days trading horizon Tangerine Balanced Growth is expected to generate 0.7 times more return on investment than Fidelity ClearPath. However, Tangerine Balanced Growth is 1.44 times less risky than Fidelity ClearPath. It trades about 0.13 of its potential returns per unit of risk. Fidelity ClearPath 2045 is currently generating about 0.08 per unit of risk. If you would invest  1,838  in Tangerine Balanced Growth on October 5, 2024 and sell it today you would earn a total of  388.00  from holding Tangerine Balanced Growth or generate 21.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.68%
Values	Daily Returns

Tangerine Balanced Growth  vs.  Fidelity ClearPath 2045

Tangerine Balanced Growth

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tangerine Balanced Growth are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Tangerine Balanced is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Fidelity ClearPath 2045

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity ClearPath 2045 has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Fidelity ClearPath is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tangerine Balanced and Fidelity ClearPath

The main advantage of trading using opposite Tangerine Balanced and Fidelity ClearPath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tangerine Balanced position performs unexpectedly, Fidelity ClearPath 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 ClearPath will offset losses from the drop in Fidelity ClearPath's long position.

The idea behind Tangerine Balanced Growth and Fidelity ClearPath 2045 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.