Correlation Between Fidelity Series and Sarofim Equity

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

By analyzing existing cross correlation between Fidelity Series Large and Sarofim Equity, you can compare the effects of market volatilities on Fidelity Series and Sarofim Equity 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 Series with a short position of Sarofim Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and Sarofim Equity.

Diversification Opportunities for Fidelity Series and Sarofim Equity

0.0

Correlation Coefficient

Fidelity Series  Sarofim Equity

Pay attention - limited upside

The 3 months correlation between Fidelity and Sarofim is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series Large and Sarofim Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarofim Equity and Fidelity Series 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 Series Large are associated (or correlated) with Sarofim Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarofim Equity has no effect on the direction of Fidelity Series i.e., Fidelity Series and Sarofim Equity go up and down completely randomly.

Pair Corralation between Fidelity Series and Sarofim Equity

If you would invest  0.00  in Fidelity Series Large on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Fidelity Series Large or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Fidelity Series Large  vs.  Sarofim Equity

Fidelity Series Large

Risk-Adjusted Performance

0 of 100

Good

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

Sarofim Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sarofim Equity 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 primary 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 Series and Sarofim Equity

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

The idea behind Fidelity Series Large and Sarofim Equity 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.