Correlation Between Fidelity Convertible and Rbc Bluebay

Can any of the company-specific risk be diversified away by investing in both Fidelity Convertible and Rbc Bluebay 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 Rbc Bluebay 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 Rbc Bluebay Absolute, you can compare the effects of market volatilities on Fidelity Convertible and Rbc Bluebay 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 Rbc Bluebay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Convertible and Rbc Bluebay.

Diversification Opportunities for Fidelity Convertible and Rbc Bluebay

-0.33

Correlation Coefficient

Fidelity Convertible  Rbc Bluebay

Very good diversification

The 3 months correlation between Fidelity and Rbc is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Vertible Securities and Rbc Bluebay Absolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Bluebay Absolute 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 Rbc Bluebay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Bluebay Absolute has no effect on the direction of Fidelity Convertible i.e., Fidelity Convertible and Rbc Bluebay go up and down completely randomly.

Pair Corralation between Fidelity Convertible and Rbc Bluebay

Assuming the 90 days horizon Fidelity Vertible Securities is expected to generate 0.44 times more return on investment than Rbc Bluebay. However, Fidelity Vertible Securities is 2.25 times less risky than Rbc Bluebay. It trades about 0.02 of its potential returns per unit of risk. Rbc Bluebay Absolute is currently generating about -0.18 per unit of risk. If you would invest  3,473  in Fidelity Vertible Securities on October 6, 2024 and sell it today you would earn a total of  28.00  from holding Fidelity Vertible Securities or generate 0.81% return on investment over 90 days.

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

Fidelity Vertible Securities  vs.  Rbc Bluebay Absolute

Fidelity Convertible

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Vertible Securities 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 Convertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rbc Bluebay Absolute

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbc Bluebay Absolute has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Fidelity Convertible and Rbc Bluebay

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

The idea behind Fidelity Vertible Securities and Rbc Bluebay Absolute 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.