Correlation Between Profunds-large Cap and Fidelity Large
Can any of the company-specific risk be diversified away by investing in both Profunds-large Cap and Fidelity Large 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 Profunds-large Cap and Fidelity Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profunds Large Cap Growth and Fidelity Large Cap, you can compare the effects of market volatilities on Profunds-large Cap and Fidelity Large 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 Profunds-large Cap with a short position of Fidelity Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profunds-large Cap and Fidelity Large.
Diversification Opportunities for Profunds-large Cap and Fidelity Large
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Profunds-large and Fidelity is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Large Cap Growth and Fidelity Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Large Cap and Profunds-large Cap 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 Profunds Large Cap Growth are associated (or correlated) with Fidelity Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Large Cap has no effect on the direction of Profunds-large Cap i.e., Profunds-large Cap and Fidelity Large go up and down completely randomly.
Pair Corralation between Profunds-large Cap and Fidelity Large
Assuming the 90 days horizon Profunds-large Cap is expected to generate 1.41 times less return on investment than Fidelity Large. In addition to that, Profunds-large Cap is 1.51 times more volatile than Fidelity Large Cap. It trades about 0.29 of its total potential returns per unit of risk. Fidelity Large Cap is currently generating about 0.61 per unit of volatility. If you would invest 1,616 in Fidelity Large Cap on April 16, 2025 and sell it today you would earn a total of 93.00 from holding Fidelity Large Cap or generate 5.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profunds Large Cap Growth vs. Fidelity Large Cap
Performance |
| Timeline |
| Profunds Large Cap |
| Fidelity Large Cap |
Profunds-large Cap and Fidelity Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profunds-large Cap and Fidelity Large
The main advantage of trading using opposite Profunds-large Cap and Fidelity Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profunds-large Cap position performs unexpectedly, Fidelity Large 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 Large will offset losses from the drop in Fidelity Large's long position.| Profunds-large Cap vs. Short Real Estate | Profunds-large Cap vs. Short Real Estate | Profunds-large Cap vs. Ultrashort Mid Cap Profund | Profunds-large Cap vs. Ultrashort Mid Cap Profund |
| Fidelity Large vs. Prudential High Yield | Fidelity Large vs. Ab High Income | Fidelity Large vs. Metropolitan West High | Fidelity Large vs. Blackrock High Income |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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