Correlation Between Fidelity Puritan and Kbi Global

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

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

Diversification Opportunities for Fidelity Puritan and Kbi Global

0.91

Correlation Coefficient

Fidelity Puritan  Kbi Global

Almost no diversification

The 3 months correlation between Fidelity and Kbi is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Kbi Global Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Global Investors and Fidelity Puritan 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 Puritan Fund are associated (or correlated) with Kbi Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Global Investors has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Kbi Global go up and down completely randomly.

Pair Corralation between Fidelity Puritan and Kbi Global

Assuming the 90 days horizon Fidelity Puritan Fund is expected to under-perform the Kbi Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Puritan Fund is 1.1 times less risky than Kbi Global. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Kbi Global Investors is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,245  in Kbi Global Investors on February 3, 2024 and sell it today you would earn a total of  1.00  from holding Kbi Global Investors or generate 0.08% return on investment over 90 days.

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

Fidelity Puritan Fund  vs.  Kbi Global Investors

Fidelity Puritan

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Puritan Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Puritan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kbi Global Investors

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kbi Global Investors are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Kbi Global may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Fidelity Puritan and Kbi Global

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

The idea behind Fidelity Puritan Fund and Kbi Global Investors 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.