Correlation Between Fidelity 500 and OPC Energy
Can any of the company-specific risk be diversified away by investing in both Fidelity 500 and OPC Energy 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 500 and OPC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity 500 Index and OPC Energy, you can compare the effects of market volatilities on Fidelity 500 and OPC Energy 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 500 with a short position of OPC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity 500 and OPC Energy.
Diversification Opportunities for Fidelity 500 and OPC Energy
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and OPC is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity 500 Index and OPC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPC Energy and Fidelity 500 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 500 Index are associated (or correlated) with OPC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPC Energy has no effect on the direction of Fidelity 500 i.e., Fidelity 500 and OPC Energy go up and down completely randomly.
Pair Corralation between Fidelity 500 and OPC Energy
Assuming the 90 days horizon Fidelity 500 Index is expected to under-perform the OPC Energy. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity 500 Index is 3.46 times less risky than OPC Energy. The mutual fund trades about -0.17 of its potential returns per unit of risk. The OPC Energy is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 268,400 in OPC Energy on January 25, 2024 and sell it today you would earn a total of 200.00 from holding OPC Energy or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
Fidelity 500 Index vs. OPC Energy
Performance |
| Timeline |
| Fidelity 500 Index |
| OPC Energy |
Fidelity 500 and OPC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity 500 and OPC Energy
The main advantage of trading using opposite Fidelity 500 and OPC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity 500 position performs unexpectedly, OPC Energy 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 OPC Energy will offset losses from the drop in OPC Energy's long position.| Fidelity 500 vs. Vanguard Total Stock | Fidelity 500 vs. Vanguard 500 Index | Fidelity 500 vs. Vanguard Total Stock | Fidelity 500 vs. Vanguard Total Stock |
| OPC Energy vs. Energix Renewable Energies | OPC Energy vs. Doral Group Renewable | OPC Energy vs. Elbit Systems | OPC Energy vs. Electreon Wireless |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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