Correlation Between Fidelity New and Hussman Strategic

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

By analyzing existing cross correlation between Fidelity New Markets and Hussman Strategic Total, you can compare the effects of market volatilities on Fidelity New and Hussman Strategic 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 New with a short position of Hussman Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Hussman Strategic.

Diversification Opportunities for Fidelity New and Hussman Strategic

0.24

Correlation Coefficient

Fidelity New  Hussman Strategic

Modest diversification

The 3 months correlation between Fidelity and Hussman is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Markets and Hussman Strategic Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hussman Strategic Total and Fidelity New 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 New Markets are associated (or correlated) with Hussman Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hussman Strategic Total has no effect on the direction of Fidelity New i.e., Fidelity New and Hussman Strategic go up and down completely randomly.

Pair Corralation between Fidelity New and Hussman Strategic

Assuming the 90 days horizon Fidelity New Markets is expected to under-perform the Hussman Strategic. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity New Markets is 1.05 times less risky than Hussman Strategic. The mutual fund trades about -0.33 of its potential returns per unit of risk. The Hussman Strategic Total is currently generating about -0.26 of returns per unit of risk over similar time horizon. If you would invest  1,455  in Hussman Strategic Total on October 10, 2024 and sell it today you would lose (23.00) from holding Hussman Strategic Total or give up 1.58% of portfolio value over 90 days.

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

Fidelity New Markets  vs.  Hussman Strategic Total

Fidelity New Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity New Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Fidelity New is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hussman Strategic Total

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hussman Strategic Total has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hussman Strategic 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 New and Hussman Strategic

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

The idea behind Fidelity New Markets and Hussman Strategic Total 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.