Correlation Between Fidelity Dynamic and FT Cboe

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

By analyzing existing cross correlation between Fidelity Dynamic Buffered and FT Cboe Vest, you can compare the effects of market volatilities on Fidelity Dynamic and FT Cboe 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 Dynamic with a short position of FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Dynamic and FT Cboe.

Diversification Opportunities for Fidelity Dynamic and FT Cboe

0.99

Correlation Coefficient

Fidelity Dynamic  FT Cboe

No risk reduction

The 3 months correlation between Fidelity and DJUN is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Dynamic Buffered and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest and Fidelity Dynamic 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 Dynamic Buffered are associated (or correlated) with FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of Fidelity Dynamic i.e., Fidelity Dynamic and FT Cboe go up and down completely randomly.

Pair Corralation between Fidelity Dynamic and FT Cboe

Given the investment horizon of 90 days Fidelity Dynamic Buffered is expected to under-perform the FT Cboe. In addition to that, Fidelity Dynamic is 1.3 times more volatile than FT Cboe Vest. It trades about -0.09 of its total potential returns per unit of risk. FT Cboe Vest is currently generating about -0.07 per unit of volatility. If you would invest  4,381  in FT Cboe Vest on October 10, 2024 and sell it today you would lose (34.00) from holding FT Cboe Vest or give up 0.78% of portfolio value over 90 days.

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

Fidelity Dynamic Buffered  vs.  FT Cboe Vest

Fidelity Dynamic Buffered

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Dynamic Buffered are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Fidelity Dynamic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

FT Cboe Vest

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FT Cboe Vest are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, FT Cboe is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Dynamic and FT Cboe

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

The idea behind Fidelity Dynamic Buffered and FT Cboe Vest 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.