Correlation Between Fidelity Series and Icon Utilities

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

By analyzing existing cross correlation between Fidelity Series 1000 and Icon Utilities And, you can compare the effects of market volatilities on Fidelity Series and Icon Utilities 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 Series with a short position of Icon Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and Icon Utilities.

Diversification Opportunities for Fidelity Series and Icon Utilities

0.64

Correlation Coefficient

Fidelity Series  Icon Utilities

Poor diversification

The 3 months correlation between Fidelity and Icon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series 1000 and Icon Utilities And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Utilities And and Fidelity Series 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 Series 1000 are associated (or correlated) with Icon Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Utilities And has no effect on the direction of Fidelity Series i.e., Fidelity Series and Icon Utilities go up and down completely randomly.

Pair Corralation between Fidelity Series and Icon Utilities

Assuming the 90 days horizon Fidelity Series 1000 is expected to under-perform the Icon Utilities. In addition to that, Fidelity Series is 1.3 times more volatile than Icon Utilities And. It trades about -0.26 of its total potential returns per unit of risk. Icon Utilities And is currently generating about -0.17 per unit of volatility. If you would invest  983.00  in Icon Utilities And on September 18, 2024 and sell it today you would lose (22.00) from holding Icon Utilities And or give up 2.24% of portfolio value over 90 days.

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

Fidelity Series 1000  vs.  Icon Utilities And

Fidelity Series 1000

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Series 1000 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Icon Utilities And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Icon Utilities And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Icon Utilities is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Series and Icon Utilities

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

The idea behind Fidelity Series 1000 and Icon Utilities And 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.