Correlation Between Fidelity Select and Oil Equipment
Can any of the company-specific risk be diversified away by investing in both Fidelity Select and Oil Equipment 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 Select and Oil Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Select Portfolios and Oil Equipment Services, you can compare the effects of market volatilities on Fidelity Select and Oil Equipment 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 Select with a short position of Oil Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Select and Oil Equipment.
Diversification Opportunities for Fidelity Select and Oil Equipment
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Oil is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Select Portfolios and Oil Equipment Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Equipment Services and Fidelity Select 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 Select Portfolios are associated (or correlated) with Oil Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Equipment Services has no effect on the direction of Fidelity Select i.e., Fidelity Select and Oil Equipment go up and down completely randomly.
Pair Corralation between Fidelity Select and Oil Equipment
Assuming the 90 days horizon Fidelity Select Portfolios is expected to generate 0.44 times more return on investment than Oil Equipment. However, Fidelity Select Portfolios is 2.26 times less risky than Oil Equipment. It trades about 0.13 of its potential returns per unit of risk. Oil Equipment Services is currently generating about -0.08 per unit of risk. If you would invest 6,316 in Fidelity Select Portfolios on January 24, 2024 and sell it today you would earn a total of 136.00 from holding Fidelity Select Portfolios or generate 2.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Fidelity Select Portfolios vs. Oil Equipment Services
Performance |
Timeline |
Fidelity Select Port |
Oil Equipment Services |
Fidelity Select and Oil Equipment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity Select and Oil Equipment
The main advantage of trading using opposite Fidelity Select and Oil Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Select position performs unexpectedly, Oil Equipment 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 Oil Equipment will offset losses from the drop in Oil Equipment's long position.Fidelity Select vs. Fidelity Freedom 2015 | Fidelity Select vs. Fidelity Puritan Fund | Fidelity Select vs. Fidelity Puritan Fund | Fidelity Select vs. Fidelity Pennsylvania Municipal |
Oil Equipment vs. Short Real Estate | Oil Equipment vs. Short Real Estate | Oil Equipment vs. Ultrashort Mid Cap Profund | Oil Equipment vs. Ultrashort Mid Cap Profund |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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