Correlation Between Pear Tree and Fidelity Capital

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

By analyzing existing cross correlation between Pear Tree Panagora and Fidelity Capital Income, you can compare the effects of market volatilities on Pear Tree and Fidelity Capital 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 Pear Tree with a short position of Fidelity Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pear Tree and Fidelity Capital.

Diversification Opportunities for Pear Tree and Fidelity Capital

0.0

Correlation Coefficient

Pear Tree  Fidelity Capital

Pay attention - limited upside

The 3 months correlation between Pear and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pear Tree Panagora and Fidelity Capital Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Capital Income and Pear Tree 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 Pear Tree Panagora are associated (or correlated) with Fidelity Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Capital Income has no effect on the direction of Pear Tree i.e., Pear Tree and Fidelity Capital go up and down completely randomly.

Pair Corralation between Pear Tree and Fidelity Capital

If you would invest  1,014  in Fidelity Capital Income on December 2, 2024 and sell it today you would earn a total of  5.00  from holding Fidelity Capital Income or generate 0.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Pear Tree Panagora  vs.  Fidelity Capital Income

Pear Tree Panagora

Risk-Adjusted Performance

Very Weak

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

Fidelity Capital Income

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Pear Tree and Fidelity Capital

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

The idea behind Pear Tree Panagora and Fidelity Capital Income 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.