Can any of the company-specific risk be diversified away by investing in both Equinox Campbell and Fidelity Blue 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 Equinox Campbell and Fidelity Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinox Campbell Strategy and Fidelity Blue Chip, you can compare the effects of market volatilities on Equinox Campbell and Fidelity Blue 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 Equinox Campbell with a short position of Fidelity Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Campbell and Fidelity Blue.
Diversification Opportunities for Equinox Campbell and Fidelity Blue
The 3 months correlation between Equinox and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EQUINOX CAMPBELL STRATEGY and Fidelity Blue Chip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Blue Chip and Equinox Campbell 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 Equinox Campbell Strategy are associated (or correlated) with Fidelity Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Blue Chip has no effect on the direction of Equinox Campbell i.e., Equinox Campbell and Fidelity Blue go up and down completely randomly.
Pair Corralation between Equinox Campbell and Fidelity Blue
If you would invest 2,937 in Fidelity Blue Chip on September 3, 2023 and sell it today you would earn a total of 238.00 from holding Fidelity Blue Chip or generate 8.1% return on investment over 90 days.
Over the last 90 days Equinox Campbell Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Equinox Campbell is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Blue Chip are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Fidelity Blue is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Equinox Campbell and Fidelity Blue Volatility Contrast
Predicted Return Density
Pair Trading with Equinox Campbell and Fidelity Blue
The main advantage of trading using opposite Equinox Campbell and Fidelity Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinox Campbell position performs unexpectedly, Fidelity Blue 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 Blue will offset losses from the drop in Fidelity Blue's long position.
The idea behind Equinox Campbell Strategy and Fidelity Blue Chip 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.
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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