Correlation Between Virtus Nfj and Fidelity Series

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

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

Diversification Opportunities for Virtus Nfj and Fidelity Series

0.98

Correlation Coefficient

Virtus Nfj  Fidelity Series

Almost no diversification

The 3 months correlation between Virtus and Fidelity is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Nfj Large Cap and Fidelity Series 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series 1000 and Virtus Nfj 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 Virtus Nfj Large Cap are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series 1000 has no effect on the direction of Virtus Nfj i.e., Virtus Nfj and Fidelity Series go up and down completely randomly.

Pair Corralation between Virtus Nfj and Fidelity Series

Assuming the 90 days horizon Virtus Nfj is expected to generate 1.14 times less return on investment than Fidelity Series. But when comparing it to its historical volatility, Virtus Nfj Large Cap is 1.05 times less risky than Fidelity Series. It trades about 0.36 of its potential returns per unit of risk. Fidelity Series 1000 is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  1,695  in Fidelity Series 1000 on September 1, 2024 and sell it today you would earn a total of  109.00  from holding Fidelity Series 1000 or generate 6.43% return on investment over 90 days.

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

Virtus Nfj Large Cap  vs.  Fidelity Series 1000

Virtus Nfj Large

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Nfj Large Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Virtus Nfj is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Series 1000

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Series 1000 are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Series may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Virtus Nfj and Fidelity Series

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

The idea behind Virtus Nfj Large Cap and Fidelity Series 1000 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 Global Correlations module to find global opportunities by holding instruments from different markets.