Correlation Between Fidelity Convertible and Dreyfus International

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

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

Diversification Opportunities for Fidelity Convertible and Dreyfus International

0.07

Correlation Coefficient

Fidelity Convertible  Dreyfus International

Significant diversification

The 3 months correlation between Fidelity and Dreyfus is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Vertible Securities and Dreyfus International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus International and Fidelity Convertible 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 Vertible Securities are associated (or correlated) with Dreyfus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus International has no effect on the direction of Fidelity Convertible i.e., Fidelity Convertible and Dreyfus International go up and down completely randomly.

Pair Corralation between Fidelity Convertible and Dreyfus International

Assuming the 90 days horizon Fidelity Vertible Securities is expected to generate 1.21 times more return on investment than Dreyfus International. However, Fidelity Convertible is 1.21 times more volatile than Dreyfus International Stock. It trades about 0.05 of its potential returns per unit of risk. Dreyfus International Stock is currently generating about -0.02 per unit of risk. If you would invest  3,492  in Fidelity Vertible Securities on October 24, 2024 and sell it today you would earn a total of  87.00  from holding Fidelity Vertible Securities or generate 2.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Fidelity Vertible Securities  vs.  Dreyfus International Stock

Fidelity Convertible

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Vertible Securities are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Convertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dreyfus International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfus International Stock has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Dreyfus International 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 Convertible and Dreyfus International

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

The idea behind Fidelity Vertible Securities and Dreyfus International 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..