Correlation Between Stringer Growth and Fidelity Select

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

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

Diversification Opportunities for Stringer Growth and Fidelity Select

0.62

Correlation Coefficient

Stringer Growth  Fidelity Select

Poor diversification

The 3 months correlation between Stringer and Fidelity is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Stringer Growth Fund and Fidelity Select Semiconductors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Select Semi and Stringer Growth 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 Stringer Growth Fund are associated (or correlated) with Fidelity Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Select Semi has no effect on the direction of Stringer Growth i.e., Stringer Growth and Fidelity Select go up and down completely randomly.

Pair Corralation between Stringer Growth and Fidelity Select

If you would invest  2,140  in Fidelity Select Semiconductors on February 7, 2024 and sell it today you would earn a total of  894.00  from holding Fidelity Select Semiconductors or generate 41.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

Stringer Growth Fund  vs.  Fidelity Select Semiconductors

Stringer Growth

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Stringer Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Stringer Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Select Semi

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Select Semiconductors are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Fidelity Select showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stringer Growth and Fidelity Select

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

The idea behind Stringer Growth Fund and Fidelity Select Semiconductors 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.