Correlation Between Fidelity Sai and Pimco Trends

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

Diversification Opportunities for Fidelity Sai and Pimco Trends

-0.32

Correlation Coefficient

Fidelity Sai  Pimco Trends

Very good diversification

The 3 months correlation between Fidelity and Pimco is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai Emerging and Pimco Trends Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Trends Managed 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 Pimco Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Trends Managed has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and Pimco Trends go up and down completely randomly.

Pair Corralation between Fidelity Sai and Pimco Trends

Assuming the 90 days horizon Fidelity Sai Emerging is expected to generate 1.21 times more return on investment than Pimco Trends. However, Fidelity Sai is 1.21 times more volatile than Pimco Trends Managed. It trades about 0.01 of its potential returns per unit of risk. Pimco Trends Managed is currently generating about -0.03 per unit of risk. If you would invest  1,087  in Fidelity Sai Emerging on September 25, 2024 and sell it today you would earn a total of  18.00  from holding Fidelity Sai Emerging or generate 1.66% 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.  Pimco Trends Managed

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.

Pimco Trends Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Trends Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Pimco Trends 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 Pimco Trends

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

The idea behind Fidelity Sai Emerging and Pimco Trends Managed 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.