Correlation Between Nasdaq-100(r) and Fidelity New
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Fidelity New 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 Nasdaq-100(r) and Fidelity New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Fidelity New Markets, you can compare the effects of market volatilities on Nasdaq-100(r) and Fidelity New 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 Nasdaq-100(r) with a short position of Fidelity New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Fidelity New.
Diversification Opportunities for Nasdaq-100(r) and Fidelity New
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nasdaq-100(r) and Fidelity is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Fidelity New Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity New Markets and Nasdaq-100(r) 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 Nasdaq 100 2x Strategy are associated (or correlated) with Fidelity New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity New Markets has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Fidelity New go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Fidelity New
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to under-perform the Fidelity New. In addition to that, Nasdaq-100(r) is 8.59 times more volatile than Fidelity New Markets. It trades about -0.12 of its total potential returns per unit of risk. Fidelity New Markets is currently generating about 0.04 per unit of volatility. If you would invest 1,283 in Fidelity New Markets on December 8, 2024 and sell it today you would earn a total of 9.00 from holding Fidelity New Markets or generate 0.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Fidelity New Markets
Performance |
Timeline |
Nasdaq 100 2x |
Fidelity New Markets |
Nasdaq-100(r) and Fidelity New Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nasdaq-100(r) and Fidelity New
The main advantage of trading using opposite Nasdaq-100(r) and Fidelity New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Fidelity New 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 New will offset losses from the drop in Fidelity New's long position.Nasdaq-100(r) vs. Multisector Bond Sma | Nasdaq-100(r) vs. Siit High Yield | Nasdaq-100(r) vs. Intermediate Bond Fund | Nasdaq-100(r) vs. Barings High Yield |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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