Correlation Between Fidelity Real and Ladenburg Growth

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

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

Diversification Opportunities for Fidelity Real and Ladenburg Growth

-0.16

Correlation Coefficient

Fidelity Real  Ladenburg Growth

Good diversification

The 3 months correlation between Fidelity and Ladenburg is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Real Estate and Ladenburg Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Growth and Fidelity Real 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 Real Estate are associated (or correlated) with Ladenburg Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Growth has no effect on the direction of Fidelity Real i.e., Fidelity Real and Ladenburg Growth go up and down completely randomly.

Pair Corralation between Fidelity Real and Ladenburg Growth

Assuming the 90 days horizon Fidelity Real is expected to generate 1.53 times less return on investment than Ladenburg Growth. But when comparing it to its historical volatility, Fidelity Real Estate is 2.07 times less risky than Ladenburg Growth. It trades about 0.13 of its potential returns per unit of risk. Ladenburg Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,584  in Ladenburg Growth on September 13, 2024 and sell it today you would earn a total of  266.00  from holding Ladenburg Growth or generate 16.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fidelity Real Estate  vs.  Ladenburg Growth

Fidelity Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ladenburg Growth

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ladenburg Growth are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Ladenburg Growth 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 Real and Ladenburg Growth

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

The idea behind Fidelity Real Estate and Ladenburg Growth 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.