Correlation Between NYSE Composite and Fidelity Flex
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Flex 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 NYSE Composite and Fidelity Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Fidelity Flex Small, you can compare the effects of market volatilities on NYSE Composite and Fidelity Flex 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 NYSE Composite with a short position of Fidelity Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Flex.
Diversification Opportunities for NYSE Composite and Fidelity Flex
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Fidelity is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity Flex Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Small and NYSE Composite 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 NYSE Composite are associated (or correlated) with Fidelity Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Flex Small has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Flex go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Flex
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.62 times more return on investment than Fidelity Flex. However, NYSE Composite is 1.61 times less risky than Fidelity Flex. It trades about -0.02 of its potential returns per unit of risk. Fidelity Flex Small is currently generating about -0.16 per unit of risk. If you would invest 2,021,322 in NYSE Composite on December 1, 2024 and sell it today you would lose (18,503) from holding NYSE Composite or give up 0.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Fidelity Flex Small
Performance |
Timeline |
NYSE Composite and Fidelity Flex Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Flex Small
Pair trading matchups for Fidelity Flex
Pair Trading with NYSE Composite and Fidelity Flex
The main advantage of trading using opposite NYSE Composite and Fidelity Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Flex 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 Flex will offset losses from the drop in Fidelity Flex's long position.NYSE Composite vs. Jerash Holdings | NYSE Composite vs. European Wax Center | NYSE Composite vs. Ralph Lauren Corp | NYSE Composite vs. Toro Co |
Fidelity Flex vs. Fidelity Flex Mid | Fidelity Flex vs. Fidelity Flex International | Fidelity Flex vs. Fidelity Flex 500 | Fidelity Flex vs. Fidelity Flex Municipal |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
Global Correlations Find global opportunities by holding instruments from different markets | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Bonds Directory Find actively traded corporate debentures issued by US companies |