Correlation Between Fidelity Sai and Thornburg Value

Can any of the company-specific risk be diversified away by investing in both Fidelity Sai and Thornburg Value 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 Thornburg Value 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 Thornburg Value Fund, you can compare the effects of market volatilities on Fidelity Sai and Thornburg Value 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 Thornburg Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sai and Thornburg Value.

Diversification Opportunities for Fidelity Sai and Thornburg Value

-0.69

Correlation Coefficient

Fidelity Sai  Thornburg Value

Excellent diversification

The 3 months correlation between Fidelity and Thornburg is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai Convertible and Thornburg Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Value 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 Thornburg Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Value has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and Thornburg Value go up and down completely randomly.

Pair Corralation between Fidelity Sai and Thornburg Value

Assuming the 90 days horizon Fidelity Sai Convertible is expected to generate 0.09 times more return on investment than Thornburg Value. However, Fidelity Sai Convertible is 11.65 times less risky than Thornburg Value. It trades about 0.48 of its potential returns per unit of risk. Thornburg Value Fund is currently generating about -0.2 per unit of risk. If you would invest  1,046  in Fidelity Sai Convertible on December 4, 2024 and sell it today you would earn a total of  31.00  from holding Fidelity Sai Convertible or generate 2.96% return on investment over 90 days.

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

Fidelity Sai Convertible  vs.  Thornburg Value Fund

Fidelity Sai Convertible

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sai Convertible are ranked lower than 37 (%) 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.

Thornburg Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thornburg Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Fidelity Sai and Thornburg Value

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

The idea behind Fidelity Sai Convertible and Thornburg Value Fund 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.