Correlation Between Fidelity 500 and Apple

Can any of the company-specific risk be diversified away by investing in both Fidelity 500 and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Fidelity 500 and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity 500 and Apple.

Diversification Opportunities for Fidelity 500 and Apple

0.0

Correlation Coefficient

Fidelity 500  Apple

Pay attention - limited upside

The 3 months correlation between Fidelity and Apple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity 500 Index and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Fidelity 500 i.e., Fidelity 500 and Apple go up and down completely randomly.

Pair Corralation between Fidelity 500 and Apple

If you would invest  17,086  in Apple Inc on February 3, 2024 and sell it today you would earn a total of  217.00  from holding Apple Inc or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fidelity 500 Index  vs.  Apple Inc

Fidelity 500 Index

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity 500 Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity 500 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Apple Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Fidelity 500 and Apple

The main advantage of trading using opposite Fidelity 500 and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity 500 position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.

The idea behind Fidelity 500 Index and Apple Inc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.