Correlation Between Gold Portfolio and Fidelity Select

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

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

Diversification Opportunities for Gold Portfolio and Fidelity Select

0.18

Correlation Coefficient

Gold Portfolio  Fidelity Select

Average diversification

The 3 months correlation between Gold and Fidelity is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Gold Portfolio Gold and Fidelity Select Portfolios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Select Port and Gold Portfolio 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 Gold Portfolio Gold are associated (or correlated) with Fidelity Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Select Port has no effect on the direction of Gold Portfolio i.e., Gold Portfolio and Fidelity Select go up and down completely randomly.

Pair Corralation between Gold Portfolio and Fidelity Select

Assuming the 90 days horizon Gold Portfolio Gold is expected to generate 1.19 times more return on investment than Fidelity Select. However, Gold Portfolio is 1.19 times more volatile than Fidelity Select Portfolios. It trades about 0.32 of its potential returns per unit of risk. Fidelity Select Portfolios is currently generating about 0.08 per unit of risk. If you would invest  2,442  in Gold Portfolio Gold on December 29, 2024 and sell it today you would earn a total of  851.00  from holding Gold Portfolio Gold or generate 34.85% return on investment over 90 days.

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

Gold Portfolio Gold  vs.  Fidelity Select Portfolios

Gold Portfolio Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Portfolio Gold are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Gold Portfolio showed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Select Port

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Select Portfolios are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Select may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Gold Portfolio and Fidelity Select

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

The idea behind Gold Portfolio Gold and Fidelity Select Portfolios 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.