Correlation Between Fidelity Sai and Guidemark(r) Large

Can any of the company-specific risk be diversified away by investing in both Fidelity Sai and Guidemark(r) Large 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 Sai and Guidemark(r) Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fidelity Sai Emerging and Guidemark Large Cap, you can compare the effects of market volatilities on Fidelity Sai and Guidemark(r) Large 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 Sai with a short position of Guidemark(r) Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sai and Guidemark(r) Large.

Diversification Opportunities for Fidelity Sai and Guidemark(r) Large

-0.21

Correlation Coefficient

Fidelity Sai  Guidemark(r) Large

Very good diversification

The 3 months correlation between Fidelity and Guidemark(r) is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai Emerging and Guidemark Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Large Cap and Fidelity Sai 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 Sai Emerging are associated (or correlated) with Guidemark(r) Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Large Cap has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and Guidemark(r) Large go up and down completely randomly.

Pair Corralation between Fidelity Sai and Guidemark(r) Large

Assuming the 90 days horizon Fidelity Sai is expected to generate 4.74 times less return on investment than Guidemark(r) Large. But when comparing it to its historical volatility, Fidelity Sai Emerging is 1.4 times less risky than Guidemark(r) Large. It trades about 0.02 of its potential returns per unit of risk. Guidemark Large Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,780  in Guidemark Large Cap on October 9, 2024 and sell it today you would earn a total of  536.00  from holding Guidemark Large Cap or generate 19.28% return on investment over 90 days.

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

Fidelity Sai Emerging  vs.  Guidemark Large Cap

Fidelity Sai Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Sai Emerging 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.

Guidemark Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guidemark Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Guidemark(r) Large 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 Sai and Guidemark(r) Large

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

The idea behind Fidelity Sai Emerging and Guidemark Large Cap 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.