Correlation Between Upright Assets and Fidelity Puritan

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

By analyzing existing cross correlation between Upright Assets Allocation and Fidelity Puritan Fund, you can compare the effects of market volatilities on Upright Assets and Fidelity Puritan 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 Upright Assets with a short position of Fidelity Puritan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upright Assets and Fidelity Puritan.

Diversification Opportunities for Upright Assets and Fidelity Puritan

0.92

Correlation Coefficient

Upright Assets  Fidelity Puritan

Almost no diversification

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

Pair Corralation between Upright Assets and Fidelity Puritan

Assuming the 90 days horizon Upright Assets Allocation is expected to generate 2.95 times more return on investment than Fidelity Puritan. However, Upright Assets is 2.95 times more volatile than Fidelity Puritan Fund. It trades about 0.08 of its potential returns per unit of risk. Fidelity Puritan Fund is currently generating about 0.02 per unit of risk. If you would invest  1,311  in Upright Assets Allocation on September 24, 2024 and sell it today you would earn a total of  107.00  from holding Upright Assets Allocation or generate 8.16% return on investment over 90 days.

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

Upright Assets Allocation  vs.  Fidelity Puritan Fund

Upright Assets Allocation

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Upright Assets Allocation are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Upright Assets may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity Puritan

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Puritan Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Fidelity Puritan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Upright Assets and Fidelity Puritan

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

The idea behind Upright Assets Allocation and Fidelity Puritan Fund 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.