Correlation Between Growth Fund and Fidelity Trafund
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Fidelity Trafund 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 Growth Fund and Fidelity Trafund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Fidelity Trafund Class, you can compare the effects of market volatilities on Growth Fund and Fidelity Trafund 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 Growth Fund with a short position of Fidelity Trafund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Fidelity Trafund.
Diversification Opportunities for Growth Fund and Fidelity Trafund
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Growth and Fidelity is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Fidelity Trafund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Trafund Class and Growth Fund 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 Growth Fund Of are associated (or correlated) with Fidelity Trafund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Trafund Class has no effect on the direction of Growth Fund i.e., Growth Fund and Fidelity Trafund go up and down completely randomly.
Pair Corralation between Growth Fund and Fidelity Trafund
Assuming the 90 days horizon Growth Fund Of is expected to under-perform the Fidelity Trafund. In addition to that, Growth Fund is 1.06 times more volatile than Fidelity Trafund Class. It trades about -0.23 of its total potential returns per unit of risk. Fidelity Trafund Class is currently generating about -0.19 per unit of volatility. If you would invest 1,910 in Fidelity Trafund Class on January 20, 2024 and sell it today you would lose (57.00) from holding Fidelity Trafund Class or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Growth Fund Of vs. Fidelity Trafund Class
Performance |
| Timeline |
| Growth Fund |
| Fidelity Trafund Class |
Growth Fund and Fidelity Trafund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Fidelity Trafund
The main advantage of trading using opposite Growth Fund and Fidelity Trafund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Fidelity Trafund 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 Trafund will offset losses from the drop in Fidelity Trafund's long position.| Growth Fund vs. Income Fund Of | Growth Fund vs. New World Fund | Growth Fund vs. American Mutual Fund | Growth Fund vs. American Mutual Fund |
| Fidelity Trafund vs. Fidelity Advisor International | Fidelity Trafund vs. Lord Abbett Growth | Fidelity Trafund vs. Delaware Smid Cap |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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