Correlation Between Fidelity Contrafund and Alpine High

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Can any of the company-specific risk be diversified away by investing in both Fidelity Contrafund and Alpine 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 Contrafund and Alpine High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Contrafund and Alpine High Yield, you can compare the effects of market volatilities on Fidelity Contrafund and Alpine 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 Contrafund with a short position of Alpine High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Contrafund and Alpine High.

Diversification Opportunities for Fidelity Contrafund and Alpine High

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Fidelity and Alpine is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Contrafund and Alpine High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine High Yield and Fidelity Contrafund 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 Contrafund are associated (or correlated) with Alpine High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine High Yield has no effect on the direction of Fidelity Contrafund i.e., Fidelity Contrafund and Alpine High go up and down completely randomly.

Pair Corralation between Fidelity Contrafund and Alpine High

Assuming the 90 days horizon Fidelity Contrafund is expected to under-perform the Alpine High. In addition to that, Fidelity Contrafund is 7.39 times more volatile than Alpine High Yield. It trades about -0.11 of its total potential returns per unit of risk. Alpine High Yield is currently generating about -0.26 per unit of volatility. If you would invest  924.00  in Alpine High Yield on September 23, 2024 and sell it today you would lose (8.00) from holding Alpine High Yield or give up 0.87% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Fidelity Contrafund  vs.  Alpine High Yield

 Performance 
       Timeline  
Fidelity Contrafund 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Contrafund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Contrafund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Alpine High Yield 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Alpine High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Alpine High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Contrafund and Alpine High Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fidelity Contrafund and Alpine High

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

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