Correlation Between Pimco Energy and Fidelity Flex

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

By analyzing existing cross correlation between Pimco Energy Tactical and Fidelity Flex Servative, you can compare the effects of market volatilities on Pimco Energy 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 Pimco Energy with a short position of Fidelity Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Energy and Fidelity Flex.

Diversification Opportunities for Pimco Energy and Fidelity Flex

0.0

Correlation Coefficient

Pimco Energy  Fidelity Flex

Pay attention - limited upside

The 3 months correlation between Pimco and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Energy Tactical and Fidelity Flex Servative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Servative and Pimco Energy 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 Pimco Energy Tactical 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 Servative has no effect on the direction of Pimco Energy i.e., Pimco Energy and Fidelity Flex go up and down completely randomly.

Pair Corralation between Pimco Energy and Fidelity Flex

If you would invest  2,002  in Pimco Energy Tactical on October 25, 2024 and sell it today you would earn a total of  760.00  from holding Pimco Energy Tactical or generate 37.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.49%
Values	Daily Returns

Pimco Energy Tactical  vs.  Fidelity Flex Servative

Pimco Energy Tactical

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Energy Tactical are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Pimco Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Flex Servative

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Fidelity Flex Servative has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Fidelity Flex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pimco Energy and Fidelity Flex

The main advantage of trading using opposite Pimco Energy and Fidelity Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Energy 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.

The idea behind Pimco Energy Tactical and Fidelity Flex Servative 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.