Correlation Between Fidelity Flex and Fidelity Contrafund
Can any of the company-specific risk be diversified away by investing in both Fidelity Flex and Fidelity Contrafund 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 Fidelity Flex and Fidelity Contrafund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Flex Freedom and Fidelity Contrafund, you can compare the effects of market volatilities on Fidelity Flex and Fidelity Contrafund 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 Fidelity Flex with a short position of Fidelity Contrafund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Flex and Fidelity Contrafund.
Diversification Opportunities for Fidelity Flex and Fidelity Contrafund
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Flex Freedom and Fidelity Contrafund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Contrafund and Fidelity Flex 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 Fidelity Flex Freedom are associated (or correlated) with Fidelity Contrafund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Contrafund has no effect on the direction of Fidelity Flex i.e., Fidelity Flex and Fidelity Contrafund go up and down completely randomly.
Pair Corralation between Fidelity Flex and Fidelity Contrafund
Assuming the 90 days horizon Fidelity Flex is expected to generate 2.28 times less return on investment than Fidelity Contrafund. But when comparing it to its historical volatility, Fidelity Flex Freedom is 1.28 times less risky than Fidelity Contrafund. It trades about 0.07 of its potential returns per unit of risk. Fidelity Contrafund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,314 in Fidelity Contrafund on January 28, 2024 and sell it today you would earn a total of 528.00 from holding Fidelity Contrafund or generate 40.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Fidelity Flex Freedom vs. Fidelity Contrafund
Performance |
Timeline |
Fidelity Flex Freedom |
Fidelity Contrafund |
Fidelity Flex and Fidelity Contrafund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity Flex and Fidelity Contrafund
The main advantage of trading using opposite Fidelity Flex and Fidelity Contrafund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Flex position performs unexpectedly, Fidelity Contrafund 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 Contrafund will offset losses from the drop in Fidelity Contrafund's long position.Fidelity Flex vs. Vanguard Target Retirement | Fidelity Flex vs. American Funds 2050 | Fidelity Flex vs. Fidelity Freedom 2050 | Fidelity Flex vs. Fidelity Freedom 2050 |
Fidelity Contrafund vs. Janus Enterprise Fund | Fidelity Contrafund vs. Janus Global Technology | Fidelity Contrafund vs. Janus Global Research | Fidelity Contrafund vs. Janus Growth And |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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