Correlation Between Maingate Mlp and Fidelity Focused

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

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

Diversification Opportunities for Maingate Mlp and Fidelity Focused

0.75

Correlation Coefficient

Maingate Mlp  Fidelity Focused

Poor diversification

The 3 months correlation between Maingate and Fidelity is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Maingate Mlp Fund and Fidelity Focused Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Focused Stock and Maingate Mlp 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 Maingate Mlp Fund are associated (or correlated) with Fidelity Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Focused Stock has no effect on the direction of Maingate Mlp i.e., Maingate Mlp and Fidelity Focused go up and down completely randomly.

Pair Corralation between Maingate Mlp and Fidelity Focused

Assuming the 90 days horizon Maingate Mlp Fund is expected to generate 0.55 times more return on investment than Fidelity Focused. However, Maingate Mlp Fund is 1.83 times less risky than Fidelity Focused. It trades about -0.01 of its potential returns per unit of risk. Fidelity Focused Stock is currently generating about -0.12 per unit of risk. If you would invest  1,041  in Maingate Mlp Fund on September 17, 2024 and sell it today you would lose (4.00) from holding Maingate Mlp Fund or give up 0.38% of portfolio value over 90 days.

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

Maingate Mlp Fund  vs.  Fidelity Focused Stock

Maingate Mlp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maingate Mlp Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Maingate Mlp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity Focused Stock

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Maingate Mlp and Fidelity Focused

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

The idea behind Maingate Mlp Fund and Fidelity Focused Stock 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.