Correlation Between Fidelity Greenwood and Fidelity Series

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

By analyzing existing cross correlation between Fidelity Greenwood Street and Fidelity Series Large, you can compare the effects of market volatilities on Fidelity Greenwood and Fidelity Series 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 Greenwood with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Greenwood and Fidelity Series.

Diversification Opportunities for Fidelity Greenwood and Fidelity Series

-0.35

Correlation Coefficient

Fidelity Greenwood  Fidelity Series

Very good diversification

The 3 months correlation between Fidelity and Fidelity is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Greenwood Street and Fidelity Series Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Large and Fidelity Greenwood 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 Greenwood Street are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Large has no effect on the direction of Fidelity Greenwood i.e., Fidelity Greenwood and Fidelity Series go up and down completely randomly.

Pair Corralation between Fidelity Greenwood and Fidelity Series

Assuming the 90 days horizon Fidelity Greenwood Street is expected to under-perform the Fidelity Series. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Greenwood Street is 1.49 times less risky than Fidelity Series. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Fidelity Series Large is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,341  in Fidelity Series Large on October 7, 2024 and sell it today you would earn a total of  236.00  from holding Fidelity Series Large or generate 10.08% return on investment over 90 days.

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

Fidelity Greenwood Street  vs.  Fidelity Series Large

Fidelity Greenwood Street

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Greenwood Street has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Fidelity Series Large

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Series Large are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Fidelity Series may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Fidelity Greenwood and Fidelity Series

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

The idea behind Fidelity Greenwood Street and Fidelity Series Large 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.