Correlation Between Fidelity Capital and Alpine High

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

By analyzing existing cross correlation between Fidelity Capital Income and Alpine High Yield, you can compare the effects of market volatilities on Fidelity Capital and Alpine High 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 Fidelity Capital with a short position of Alpine High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and Alpine High.

Diversification Opportunities for Fidelity Capital and Alpine High

0.02

Correlation Coefficient

Fidelity Capital  Alpine High

Significant diversification

The 3 months correlation between Fidelity and Alpine is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and Alpine High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine High Yield and Fidelity Capital 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 Fidelity Capital Income are associated (or correlated) with Alpine High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine High Yield has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and Alpine High go up and down completely randomly.

Pair Corralation between Fidelity Capital and Alpine High

Assuming the 90 days horizon Fidelity Capital Income is expected to under-perform the Alpine High. In addition to that, Fidelity Capital is 2.43 times more volatile than Alpine High Yield. It trades about -0.04 of its total potential returns per unit of risk. Alpine High Yield is currently generating about 0.03 per unit of volatility. If you would invest  908.00  in Alpine High Yield on December 30, 2024 and sell it today you would earn a total of  3.00  from holding Alpine High Yield or generate 0.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fidelity Capital Income  vs.  Alpine High Yield

Fidelity Capital Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Capital Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Fidelity Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alpine High Yield

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alpine High Yield are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Alpine High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Capital and Alpine High

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

The idea behind Fidelity Capital Income and Alpine High Yield 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.