Correlation Between Fidelity Large and Fidelity

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

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

Diversification Opportunities for Fidelity Large and Fidelity

0.52

Correlation Coefficient

Fidelity Large  Fidelity

Very weak diversification

The 3 months correlation between Fidelity and Fidelity is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Large Cap and Fidelity Sustainability Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sustainability and Fidelity Large 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 Large Cap are associated (or correlated) with Fidelity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sustainability has no effect on the direction of Fidelity Large i.e., Fidelity Large and Fidelity go up and down completely randomly.

Pair Corralation between Fidelity Large and Fidelity

Assuming the 90 days horizon Fidelity Large Cap is expected to generate 0.7 times more return on investment than Fidelity. However, Fidelity Large Cap is 1.44 times less risky than Fidelity. It trades about 0.03 of its potential returns per unit of risk. Fidelity Sustainability Index is currently generating about -0.1 per unit of risk. If you would invest  1,810  in Fidelity Large Cap on December 30, 2024 and sell it today you would earn a total of  25.00  from holding Fidelity Large Cap or generate 1.38% return on investment over 90 days.

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

Fidelity Large Cap  vs.  Fidelity Sustainability Index

Fidelity Large Cap

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Large Cap are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Sustainability

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Sustainability Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Fidelity Large and Fidelity

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

The idea behind Fidelity Large Cap and Fidelity Sustainability Index 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.