Correlation Between Fidelity High and Fidelity Series

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

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

Diversification Opportunities for Fidelity High and Fidelity Series

0.81

Correlation Coefficient

Fidelity High  Fidelity Series

Very poor diversification

The 3 months correlation between Fidelity and Fidelity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity High Income and Fidelity Series Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Floating and Fidelity High 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 High Income are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Floating has no effect on the direction of Fidelity High i.e., Fidelity High and Fidelity Series go up and down completely randomly.

Pair Corralation between Fidelity High and Fidelity Series

Assuming the 90 days horizon Fidelity High is expected to generate 2.06 times less return on investment than Fidelity Series. In addition to that, Fidelity High is 1.16 times more volatile than Fidelity Series Floating. It trades about 0.12 of its total potential returns per unit of risk. Fidelity Series Floating is currently generating about 0.28 per unit of volatility. If you would invest  883.00  in Fidelity Series Floating on September 17, 2024 and sell it today you would earn a total of  21.00  from holding Fidelity Series Floating or generate 2.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Fidelity High Income  vs.  Fidelity Series Floating

Fidelity High Income

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity High Income are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Fidelity High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Series Floating

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Series Floating are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Fidelity Series 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 High and Fidelity Series

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

The idea behind Fidelity High Income and Fidelity Series Floating 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.