Correlation Between Fidelity Summer and Fidelity Disruptive

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

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

Diversification Opportunities for Fidelity Summer and Fidelity Disruptive

0.96

Correlation Coefficient

Fidelity Summer  Fidelity Disruptive

Almost no diversification

The 3 months correlation between Fidelity and Fidelity is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Summer Street and Fidelity Disruptive Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Disruptive and Fidelity Summer 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 Summer Street are associated (or correlated) with Fidelity Disruptive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Disruptive has no effect on the direction of Fidelity Summer i.e., Fidelity Summer and Fidelity Disruptive go up and down completely randomly.

Pair Corralation between Fidelity Summer and Fidelity Disruptive

If you would invest  1,361  in Fidelity Disruptive Technology on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Fidelity Disruptive Technology or generate 0.0% return on investment over 90 days.

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

Fidelity Summer Street  vs.  Fidelity Disruptive Technology

Fidelity Summer Street

Risk-Adjusted Performance

0 of 100

Very Weak

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

Fidelity Disruptive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Disruptive Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Fidelity Disruptive 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 Summer and Fidelity Disruptive

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

The idea behind Fidelity Summer Street and Fidelity Disruptive Technology 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.