Correlation Between Fidelity Capital and Jpmorgan High

Can any of the company-specific risk be diversified away by investing in both Fidelity Capital and Jpmorgan 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 Jpmorgan 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 Jpmorgan High Yield, you can compare the effects of market volatilities on Fidelity Capital and Jpmorgan 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 Jpmorgan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and Jpmorgan High.

Diversification Opportunities for Fidelity Capital and Jpmorgan High

0.91

Correlation Coefficient

Fidelity Capital  Jpmorgan High

Almost no diversification

The 3 months correlation between Fidelity and Jpmorgan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and Jpmorgan High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan 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 Jpmorgan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan High Yield has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and Jpmorgan High go up and down completely randomly.

Pair Corralation between Fidelity Capital and Jpmorgan High

Assuming the 90 days horizon Fidelity Capital Income is expected to generate 1.54 times more return on investment than Jpmorgan High. However, Fidelity Capital is 1.54 times more volatile than Jpmorgan High Yield. It trades about 0.3 of its potential returns per unit of risk. Jpmorgan High Yield is currently generating about 0.13 per unit of risk. If you would invest  994.00  in Fidelity Capital Income on September 14, 2024 and sell it today you would earn a total of  45.00  from holding Fidelity Capital Income or generate 4.53% return on investment over 90 days.

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

Fidelity Capital Income  vs.  Jpmorgan High Yield

Fidelity Capital Income

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Capital Income are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. 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.

Jpmorgan High Yield

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan High Yield are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan 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 Jpmorgan High

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

The idea behind Fidelity Capital Income and Jpmorgan 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.