Correlation Between Transamerica Large and Fidelity Sai

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

By analyzing existing cross correlation between Transamerica Large Cap and Fidelity Sai Inflationfocused, you can compare the effects of market volatilities on Transamerica Large and Fidelity Sai 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 Transamerica Large with a short position of Fidelity Sai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Large and Fidelity Sai.

Diversification Opportunities for Transamerica Large and Fidelity Sai

-0.23

Correlation Coefficient

Transamerica Large  Fidelity Sai

Very good diversification

The 3 months correlation between Transamerica and Fidelity is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Large Cap and Fidelity Sai Inflationfocused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Inflati and Transamerica Large 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 Transamerica Large Cap are associated (or correlated) with Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Inflati has no effect on the direction of Transamerica Large i.e., Transamerica Large and Fidelity Sai go up and down completely randomly.

Pair Corralation between Transamerica Large and Fidelity Sai

Assuming the 90 days horizon Transamerica Large Cap is expected to generate 0.78 times more return on investment than Fidelity Sai. However, Transamerica Large Cap is 1.29 times less risky than Fidelity Sai. It trades about 0.09 of its potential returns per unit of risk. Fidelity Sai Inflationfocused is currently generating about -0.02 per unit of risk. If you would invest  1,116  in Transamerica Large Cap on September 19, 2024 and sell it today you would earn a total of  393.00  from holding Transamerica Large Cap or generate 35.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Transamerica Large Cap  vs.  Fidelity Sai Inflationfocused

Transamerica Large Cap

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Transamerica Large Cap are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Transamerica Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Sai Inflati

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Transamerica Large and Fidelity Sai

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

The idea behind Transamerica Large Cap and Fidelity Sai Inflationfocused 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.