Correlation Between Fidelity Puritan and Fidelity Sai

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

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

Diversification Opportunities for Fidelity Puritan and Fidelity Sai

0.92

Correlation Coefficient

Fidelity Puritan  Fidelity Sai

Almost no diversification

The 3 months correlation between Fidelity and Fidelity is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Fidelity Sai Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Large and Fidelity Puritan 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 Puritan Fund are associated (or correlated) with Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Large has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Fidelity Sai go up and down completely randomly.

Pair Corralation between Fidelity Puritan and Fidelity Sai

Assuming the 90 days horizon Fidelity Puritan is expected to generate 1.41 times less return on investment than Fidelity Sai. But when comparing it to its historical volatility, Fidelity Puritan Fund is 1.26 times less risky than Fidelity Sai. It trades about 0.1 of its potential returns per unit of risk. Fidelity Sai Large is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,551  in Fidelity Sai Large on September 25, 2024 and sell it today you would earn a total of  809.00  from holding Fidelity Sai Large or generate 52.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

Fidelity Puritan Fund  vs.  Fidelity Sai Large

Fidelity Puritan

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Puritan Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Puritan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Sai Large

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Sai Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity Sai 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 Puritan and Fidelity Sai

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

The idea behind Fidelity Puritan Fund and Fidelity Sai Large 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.