Correlation Between Westwood Alternative and Fidelity Sai

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

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

Diversification Opportunities for Westwood Alternative and Fidelity Sai

-0.01

Correlation Coefficient

Westwood Alternative  Fidelity Sai

Good diversification

The 3 months correlation between Westwood and Fidelity is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Alternative Income 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 Westwood Alternative 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 Westwood Alternative Income 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 Westwood Alternative i.e., Westwood Alternative and Fidelity Sai go up and down completely randomly.

Pair Corralation between Westwood Alternative and Fidelity Sai

Assuming the 90 days horizon Westwood Alternative is expected to generate 2.29 times less return on investment than Fidelity Sai. But when comparing it to its historical volatility, Westwood Alternative Income is 13.4 times less risky than Fidelity Sai. It trades about 0.32 of its potential returns per unit of risk. Fidelity Sai Inflationfocused is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,316  in Fidelity Sai Inflationfocused on September 12, 2024 and sell it today you would earn a total of  287.00  from holding Fidelity Sai Inflationfocused or generate 3.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Westwood Alternative Income  vs.  Fidelity Sai Inflationfocused

Westwood Alternative

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Westwood Alternative Income are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Westwood Alternative 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

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sai Inflationfocused are ranked lower than 4 (%) 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 Westwood Alternative and Fidelity Sai

The main advantage of trading using opposite Westwood Alternative and Fidelity Sai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Alternative 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 Westwood Alternative Income 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.