Correlation Between Fidelity® Government and Great-west

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

By analyzing existing cross correlation between Fidelity Government Money and Great West Sp 500, you can compare the effects of market volatilities on Fidelity® Government and Great-west 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 Fidelity® Government with a short position of Great-west. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity® Government and Great-west.

Diversification Opportunities for Fidelity® Government and Great-west

0.0

Correlation Coefficient

Fidelity® Government  Great-west

Pay attention - limited upside

The 3 months correlation between Fidelity® and Great-west is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Government Money and Great West Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Sp and Fidelity® Government 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 Fidelity Government Money are associated (or correlated) with Great-west. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Sp has no effect on the direction of Fidelity® Government i.e., Fidelity® Government and Great-west go up and down completely randomly.

Pair Corralation between Fidelity® Government and Great-west

If you would invest  3,769  in Great West Sp 500 on October 12, 2024 and sell it today you would earn a total of  17.00  from holding Great West Sp 500 or generate 0.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Fidelity Government Money  vs.  Great West Sp 500

Fidelity Government Money

Risk-Adjusted Performance

0 of 100

Very Weak

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

Great West Sp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Sp 500 are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Great-west is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity® Government and Great-west

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

The idea behind Fidelity Government Money and Great West Sp 500 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.