Correlation Between Fidelity Sai and Columbia Convertible

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

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

Diversification Opportunities for Fidelity Sai and Columbia Convertible

-0.55

Correlation Coefficient

Fidelity Sai  Columbia Convertible

Excellent diversification

The 3 months correlation between Fidelity and Columbia is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai Convertible and Columbia Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Convertible and Fidelity Sai 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 Sai Convertible are associated (or correlated) with Columbia Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Convertible has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and Columbia Convertible go up and down completely randomly.

Pair Corralation between Fidelity Sai and Columbia Convertible

Assuming the 90 days horizon Fidelity Sai Convertible is expected to generate 0.14 times more return on investment than Columbia Convertible. However, Fidelity Sai Convertible is 7.37 times less risky than Columbia Convertible. It trades about 0.56 of its potential returns per unit of risk. Columbia Vertible Securities is currently generating about -0.03 per unit of risk. If you would invest  1,033  in Fidelity Sai Convertible on December 30, 2024 and sell it today you would earn a total of  36.00  from holding Fidelity Sai Convertible or generate 3.48% return on investment over 90 days.

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

Fidelity Sai Convertible  vs.  Columbia Vertible Securities

Fidelity Sai Convertible

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sai Convertible are ranked lower than 44 (%) of all funds and portfolios of funds over the last 90 days. 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.

Columbia Convertible

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Fidelity Sai Convertible and Columbia Vertible 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.