Correlation Between Simplify Volt and Fidelity Growth

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

By analyzing existing cross correlation between Simplify Volt RoboCar and Fidelity Growth Opportunities, you can compare the effects of market volatilities on Simplify Volt and Fidelity Growth 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 Simplify Volt with a short position of Fidelity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Volt and Fidelity Growth.

Diversification Opportunities for Simplify Volt and Fidelity Growth

0.87

Correlation Coefficient

Simplify Volt  Fidelity Growth

Very poor diversification

The 3 months correlation between Simplify and Fidelity is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Volt RoboCar and Fidelity Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Growth Oppo and Simplify Volt 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 Simplify Volt RoboCar are associated (or correlated) with Fidelity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Growth Oppo has no effect on the direction of Simplify Volt i.e., Simplify Volt and Fidelity Growth go up and down completely randomly.

Pair Corralation between Simplify Volt and Fidelity Growth

Given the investment horizon of 90 days Simplify Volt RoboCar is expected to generate 4.99 times more return on investment than Fidelity Growth. However, Simplify Volt is 4.99 times more volatile than Fidelity Growth Opportunities. It trades about 0.25 of its potential returns per unit of risk. Fidelity Growth Opportunities is currently generating about -0.11 per unit of risk. If you would invest  1,851  in Simplify Volt RoboCar on October 5, 2024 and sell it today you would earn a total of  534.00  from holding Simplify Volt RoboCar or generate 28.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	90.0%
Values	Daily Returns

Simplify Volt RoboCar  vs.  Fidelity Growth Opportunities

Simplify Volt RoboCar

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Volt RoboCar are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Simplify Volt reported solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Growth Oppo

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Growth Opportunities are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Fidelity Growth may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Simplify Volt and Fidelity Growth

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

The idea behind Simplify Volt RoboCar and Fidelity Growth Opportunities 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.