Correlation Between Fidelity Contrafund and Chn Strs

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

By analyzing existing cross correlation between Fidelity Contrafund and Chn Strs Insti, you can compare the effects of market volatilities on Fidelity Contrafund and Chn Strs 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 Chn Strs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Contrafund and Chn Strs.

Diversification Opportunities for Fidelity Contrafund and Chn Strs

-0.49

Correlation Coefficient

Fidelity Contrafund  Chn Strs

Very good diversification

The 3 months correlation between Fidelity and Chn is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Contrafund and Chn Strs Insti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chn Strs Insti 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 Chn Strs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chn Strs Insti has no effect on the direction of Fidelity Contrafund i.e., Fidelity Contrafund and Chn Strs go up and down completely randomly.

Pair Corralation between Fidelity Contrafund and Chn Strs

Assuming the 90 days horizon Fidelity Contrafund is expected to under-perform the Chn Strs. In addition to that, Fidelity Contrafund is 1.63 times more volatile than Chn Strs Insti. It trades about -0.03 of its total potential returns per unit of risk. Chn Strs Insti is currently generating about 0.14 per unit of volatility. If you would invest  887.00  in Chn Strs Insti on December 29, 2024 and sell it today you would earn a total of  59.00  from holding Chn Strs Insti or generate 6.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Fidelity Contrafund  vs.  Chn Strs Insti

Fidelity Contrafund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Contrafund has generated negative risk-adjusted returns adding no value to fund investors. 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.

Chn Strs Insti

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chn Strs Insti are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Chn Strs may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fidelity Contrafund and Chn Strs

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

The idea behind Fidelity Contrafund and Chn Strs Insti 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.