Correlation Between Fidelity Sai and Six Circles

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

By analyzing existing cross correlation between Fidelity Sai Convertible and Six Circles Tax, you can compare the effects of market volatilities on Fidelity Sai and Six Circles 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 Sai with a short position of Six Circles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sai and Six Circles.

Diversification Opportunities for Fidelity Sai and Six Circles

0.92

Correlation Coefficient

Fidelity Sai  Six Circles

Almost no diversification

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

Pair Corralation between Fidelity Sai and Six Circles

Assuming the 90 days horizon Fidelity Sai Convertible is expected to generate 1.9 times more return on investment than Six Circles. However, Fidelity Sai is 1.9 times more volatile than Six Circles Tax. It trades about 0.46 of its potential returns per unit of risk. Six Circles Tax is currently generating about 0.16 per unit of risk. If you would invest  1,067  in Fidelity Sai Convertible on September 5, 2024 and sell it today you would earn a total of  29.00  from holding Fidelity Sai Convertible or generate 2.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Fidelity Sai Convertible  vs.  Six Circles Tax

Fidelity Sai Convertible

Risk-Adjusted Performance

36 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sai Convertible are ranked lower than 36 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Sai is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Six Circles Tax

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Six Circles Tax are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Six Circles 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 Sai and Six Circles

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

The idea behind Fidelity Sai Convertible and Six Circles Tax 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..