Correlation Between Fidelity Convertible and Upright Growth

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

Diversification Opportunities for Fidelity Convertible and Upright Growth

0.53

Correlation Coefficient

Fidelity Convertible  Upright Growth

Very weak diversification

The 3 months correlation between Fidelity and Upright is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Vertible Securities and Upright Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upright Growth 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 Upright Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upright Growth has no effect on the direction of Fidelity Convertible i.e., Fidelity Convertible and Upright Growth go up and down completely randomly.

Pair Corralation between Fidelity Convertible and Upright Growth

Assuming the 90 days horizon Fidelity Vertible Securities is expected to under-perform the Upright Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Vertible Securities is 2.76 times less risky than Upright Growth. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Upright Growth Fund is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,098  in Upright Growth Fund on December 22, 2024 and sell it today you would lose (63.00) from holding Upright Growth Fund or give up 5.74% of portfolio value over 90 days.

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

Fidelity Vertible Securities  vs.  Upright Growth Fund

Fidelity Convertible

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Vertible Securities has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Upright Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Upright Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Upright Growth 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 Upright Growth

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

The idea behind Fidelity Vertible Securities and Upright Growth Fund 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.