Correlation Between Fidelity Dynamic and EA Series

Can any of the company-specific risk be diversified away by investing in both Fidelity Dynamic and EA 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 Dynamic and EA Series 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 EA Series Trust, you can compare the effects of market volatilities on Fidelity Dynamic and EA 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 Dynamic with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Dynamic and EA Series.

Diversification Opportunities for Fidelity Dynamic and EA Series

-0.27

Correlation Coefficient

Fidelity Dynamic  EA Series

Very good diversification

The 3 months correlation between Fidelity and MDLV is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Dynamic Buffered and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Fidelity Dynamic i.e., Fidelity Dynamic and EA Series go up and down completely randomly.

Pair Corralation between Fidelity Dynamic and EA Series

Given the investment horizon of 90 days Fidelity Dynamic Buffered is expected to under-perform the EA Series. But the etf apears to be less risky and, when comparing its historical volatility, Fidelity Dynamic Buffered is 1.22 times less risky than EA Series. The etf trades about -0.01 of its potential returns per unit of risk. The EA Series Trust is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,587  in EA Series Trust on October 25, 2024 and sell it today you would earn a total of  39.00  from holding EA Series Trust or generate 1.51% return on investment over 90 days.

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

Fidelity Dynamic Buffered  vs.  EA Series Trust

Fidelity Dynamic Buffered

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Dynamic Buffered are ranked lower than 9 (%) 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.

EA Series Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EA Series Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, EA Series is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Fidelity Dynamic and EA Series

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

The idea behind Fidelity Dynamic Buffered and EA Series Trust 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.