Correlation Between Aptus Drawdown and Fidelity Dynamic

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

By analyzing existing cross correlation between Aptus Drawdown Managed and Fidelity Dynamic Buffered, you can compare the effects of market volatilities on Aptus Drawdown and Fidelity Dynamic 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 Aptus Drawdown with a short position of Fidelity Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Drawdown and Fidelity Dynamic.

Diversification Opportunities for Aptus Drawdown and Fidelity Dynamic

0.98

Correlation Coefficient

Aptus Drawdown  Fidelity Dynamic

Almost no diversification

The 3 months correlation between Aptus and Fidelity is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Drawdown Managed and Fidelity Dynamic Buffered in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Dynamic Buffered and Aptus Drawdown 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 Aptus Drawdown Managed are associated (or correlated) with Fidelity Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Dynamic Buffered has no effect on the direction of Aptus Drawdown i.e., Aptus Drawdown and Fidelity Dynamic go up and down completely randomly.

Pair Corralation between Aptus Drawdown and Fidelity Dynamic

Given the investment horizon of 90 days Aptus Drawdown is expected to generate 1.0 times less return on investment than Fidelity Dynamic. In addition to that, Aptus Drawdown is 1.36 times more volatile than Fidelity Dynamic Buffered. It trades about 0.17 of its total potential returns per unit of risk. Fidelity Dynamic Buffered is currently generating about 0.24 per unit of volatility. If you would invest  2,576  in Fidelity Dynamic Buffered on September 2, 2024 and sell it today you would earn a total of  192.00  from holding Fidelity Dynamic Buffered or generate 7.45% return on investment over 90 days.

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

Aptus Drawdown Managed  vs.  Fidelity Dynamic Buffered

Aptus Drawdown Managed

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aptus Drawdown Managed are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, Aptus Drawdown may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity Dynamic Buffered

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Dynamic Buffered are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Fidelity Dynamic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aptus Drawdown and Fidelity Dynamic

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

The idea behind Aptus Drawdown Managed and Fidelity Dynamic Buffered 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.