Correlation Between Extended Market and Fidelity Sai
Can any of the company-specific risk be diversified away by investing in both Extended Market 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 Extended Market and Fidelity Sai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extended Market Index and Fidelity Sai Emerging, you can compare the effects of market volatilities on Extended Market 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 Extended Market with a short position of Fidelity Sai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extended Market and Fidelity Sai.
Diversification Opportunities for Extended Market and Fidelity Sai
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Extended and Fidelity is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Extended Market Index and Fidelity Sai Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Emerging and Extended Market 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 Extended Market Index 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 Emerging has no effect on the direction of Extended Market i.e., Extended Market and Fidelity Sai go up and down completely randomly.
Pair Corralation between Extended Market and Fidelity Sai
Assuming the 90 days horizon Extended Market Index is expected to generate 1.94 times more return on investment than Fidelity Sai. However, Extended Market is 1.94 times more volatile than Fidelity Sai Emerging. It trades about 0.03 of its potential returns per unit of risk. Fidelity Sai Emerging is currently generating about 0.04 per unit of risk. If you would invest 1,869 in Extended Market Index on October 5, 2024 and sell it today you would earn a total of 211.00 from holding Extended Market Index or generate 11.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Extended Market Index vs. Fidelity Sai Emerging
Performance |
Timeline |
Extended Market Index |
Fidelity Sai Emerging |
Extended Market and Fidelity Sai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Extended Market and Fidelity Sai
The main advantage of trading using opposite Extended Market and Fidelity Sai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extended Market 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.Extended Market vs. Voya Real Estate | Extended Market vs. Nuveen Real Estate | Extended Market vs. Real Estate Fund | Extended Market vs. Dunham Real Estate |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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