Correlation Between Fidelity Sai and Blue Chip

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

Diversification Opportunities for Fidelity Sai and Blue Chip

-0.08

Correlation Coefficient

Fidelity Sai  Blue Chip

Good diversification

The 3 months correlation between Fidelity and Blue is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai Inflationfocused and Blue Chip Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Chip Fund 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 Blue Chip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Chip Fund has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and Blue Chip go up and down completely randomly.

Pair Corralation between Fidelity Sai and Blue Chip

Assuming the 90 days horizon Fidelity Sai Inflationfocused is expected to under-perform the Blue Chip. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Sai Inflationfocused is 1.13 times less risky than Blue Chip. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Blue Chip Fund is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  4,650  in Blue Chip Fund on October 10, 2024 and sell it today you would lose (48.00) from holding Blue Chip Fund or give up 1.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Fidelity Sai Inflationfocused  vs.  Blue Chip Fund

Fidelity Sai Inflati

Risk-Adjusted Performance

0 of 100

Very Weak

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

Blue Chip Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Chip Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Blue Chip 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 Blue Chip

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

The idea behind Fidelity Sai Inflationfocused and Blue Chip Fund 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.