Correlation Between Fidelity Trafund and Fisher Esg

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

By analyzing existing cross correlation between Fidelity Trafund Class and Fisher Esg Stock, you can compare the effects of market volatilities on Fidelity Trafund and Fisher Esg 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 Trafund with a short position of Fisher Esg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Trafund and Fisher Esg.

Diversification Opportunities for Fidelity Trafund and Fisher Esg

0.91

Correlation Coefficient

Fidelity Trafund  Fisher Esg

Almost no diversification

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

Pair Corralation between Fidelity Trafund and Fisher Esg

Assuming the 90 days horizon Fidelity Trafund Class is expected to under-perform the Fisher Esg. In addition to that, Fidelity Trafund is 1.29 times more volatile than Fisher Esg Stock. It trades about -0.06 of its total potential returns per unit of risk. Fisher Esg Stock is currently generating about -0.03 per unit of volatility. If you would invest  1,692  in Fisher Esg Stock on December 30, 2024 and sell it today you would lose (39.00) from holding Fisher Esg Stock or give up 2.3% of portfolio value over 90 days.

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

Fidelity Trafund Class  vs.  Fisher Esg Stock

Fidelity Trafund Class

Risk-Adjusted Performance

Very Weak

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

Fisher Esg Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fisher Esg Stock has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fisher Esg 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 Trafund and Fisher Esg

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

The idea behind Fidelity Trafund Class and Fisher Esg Stock 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.