Correlation Between Fidelity Series and Real Estate

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

By analyzing existing cross correlation between Fidelity Series 1000 and Real Estate Securities, you can compare the effects of market volatilities on Fidelity Series and Real Estate 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 Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and Real Estate.

Diversification Opportunities for Fidelity Series and Real Estate

0.32

Correlation Coefficient

Fidelity Series  Real Estate

Weak diversification

The 3 months correlation between Fidelity and Real is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series 1000 and Real Estate Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Securities 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 1000 are associated (or correlated) with Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Securities has no effect on the direction of Fidelity Series i.e., Fidelity Series and Real Estate go up and down completely randomly.

Pair Corralation between Fidelity Series and Real Estate

If you would invest  2,995  in Real Estate Securities on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Real Estate Securities or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Fidelity Series 1000  vs.  Real Estate Securities

Fidelity Series 1000

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Series 1000 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Real Estate Securities

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Real Estate Securities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Real Estate 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 Series and Real Estate

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

The idea behind Fidelity Series 1000 and Real Estate Securities 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .