Correlation Between Fidelity 500 and Esquire Financial
Can any of the company-specific risk be diversified away by investing in both Fidelity 500 and Esquire Financial 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 500 and Esquire Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity 500 Index and Esquire Financial Holdings, you can compare the effects of market volatilities on Fidelity 500 and Esquire Financial 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 500 with a short position of Esquire Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity 500 and Esquire Financial.
Diversification Opportunities for Fidelity 500 and Esquire Financial
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Esquire is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity 500 Index and Esquire Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esquire Financial and Fidelity 500 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 500 Index are associated (or correlated) with Esquire Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esquire Financial has no effect on the direction of Fidelity 500 i.e., Fidelity 500 and Esquire Financial go up and down completely randomly.
Pair Corralation between Fidelity 500 and Esquire Financial
Assuming the 90 days horizon Fidelity 500 Index is expected to generate 0.35 times more return on investment than Esquire Financial. However, Fidelity 500 Index is 2.83 times less risky than Esquire Financial. It trades about 0.1 of its potential returns per unit of risk. Esquire Financial Holdings is currently generating about -0.03 per unit of risk. If you would invest 16,851 in Fidelity 500 Index on January 24, 2024 and sell it today you would earn a total of 762.00 from holding Fidelity 500 Index or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity 500 Index vs. Esquire Financial Holdings
Performance |
| Timeline |
| Fidelity 500 Index |
| Esquire Financial |
Fidelity 500 and Esquire Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity 500 and Esquire Financial
The main advantage of trading using opposite Fidelity 500 and Esquire Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity 500 position performs unexpectedly, Esquire Financial 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 Esquire Financial will offset losses from the drop in Esquire Financial's long position.| Fidelity 500 vs. Fidelity Freedom 2015 | Fidelity 500 vs. Fidelity Puritan Fund | Fidelity 500 vs. Fidelity Puritan Fund | Fidelity 500 vs. Fidelity Pennsylvania Municipal |
| Esquire Financial vs. HMN Financial | Esquire Financial vs. Lake Shore Bancorp | Esquire Financial vs. Rhinebeck Bancorp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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