Correlation Between Fidelity Mid and Unified Series

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

By analyzing existing cross correlation between Fidelity Mid Cap and Unified Series Trust, you can compare the effects of market volatilities on Fidelity Mid and Unified Series 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 Mid with a short position of Unified Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Mid and Unified Series.

Diversification Opportunities for Fidelity Mid and Unified Series

0.92

Correlation Coefficient

Fidelity Mid  Unified Series

Almost no diversification

The 3 months correlation between Fidelity and Unified is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Mid Cap and Unified Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unified Series Trust and Fidelity Mid 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 Mid Cap are associated (or correlated) with Unified Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unified Series Trust has no effect on the direction of Fidelity Mid i.e., Fidelity Mid and Unified Series go up and down completely randomly.

Pair Corralation between Fidelity Mid and Unified Series

Assuming the 90 days horizon Fidelity Mid Cap is expected to generate 1.09 times more return on investment than Unified Series. However, Fidelity Mid is 1.09 times more volatile than Unified Series Trust. It trades about 0.12 of its potential returns per unit of risk. Unified Series Trust is currently generating about 0.05 per unit of risk. If you would invest  1,486  in Fidelity Mid Cap on January 26, 2024 and sell it today you would earn a total of  96.00  from holding Fidelity Mid Cap or generate 6.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Fidelity Mid Cap  vs.  Unified Series Trust

Fidelity Mid Cap

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Mid Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Mid may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Unified Series Trust

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Unified Series Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Unified Series is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fidelity Mid and Unified Series

The main advantage of trading using opposite Fidelity Mid and Unified Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Mid position performs unexpectedly, Unified Series 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 Unified Series will offset losses from the drop in Unified Series' long position.

The idea behind Fidelity Mid Cap and Unified Series Trust 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .