Correlation Between Fidelity Sai and Northern Core

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

By analyzing existing cross correlation between Fidelity Sai Inflationfocused and Northern E Bond, you can compare the effects of market volatilities on Fidelity Sai and Northern Core 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 Northern Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sai and Northern Core.

Diversification Opportunities for Fidelity Sai and Northern Core

-0.22

Correlation Coefficient

Fidelity Sai  Northern Core

Very good diversification

The 3 months correlation between Fidelity and Northern is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai Inflationfocused and Northern E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern E Bond 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 Inflationfocused are associated (or correlated) with Northern Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern E Bond has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and Northern Core go up and down completely randomly.

Pair Corralation between Fidelity Sai and Northern Core

Assuming the 90 days horizon Fidelity Sai Inflationfocused is expected to generate 2.87 times more return on investment than Northern Core. However, Fidelity Sai is 2.87 times more volatile than Northern E Bond. It trades about 0.14 of its potential returns per unit of risk. Northern E Bond is currently generating about 0.03 per unit of risk. If you would invest  8,359  in Fidelity Sai Inflationfocused on November 28, 2024 and sell it today you would earn a total of  587.00  from holding Fidelity Sai Inflationfocused or generate 7.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Fidelity Sai Inflationfocused  vs.  Northern E Bond

Fidelity Sai Inflati

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sai Inflationfocused are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Fidelity Sai may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Northern E Bond

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Northern E Bond are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Northern Core 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 Northern Core

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

The idea behind Fidelity Sai Inflationfocused and Northern E Bond 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.