Correlation Between Wetouch Technology and Fidelity Select

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

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

Diversification Opportunities for Wetouch Technology and Fidelity Select

-0.49

Correlation Coefficient

Wetouch Technology  Fidelity Select

Very good diversification

The 3 months correlation between Wetouch and Fidelity is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Wetouch Technology Common 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 Wetouch Technology 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 Wetouch Technology Common 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 Wetouch Technology i.e., Wetouch Technology and Fidelity Select go up and down completely randomly.

Pair Corralation between Wetouch Technology and Fidelity Select

Given the investment horizon of 90 days Wetouch Technology Common is expected to under-perform the Fidelity Select. In addition to that, Wetouch Technology is 3.11 times more volatile than Fidelity Select Semiconductors. It trades about -0.26 of its total potential returns per unit of risk. Fidelity Select Semiconductors is currently generating about 0.11 per unit of volatility. If you would invest  2,954  in Fidelity Select Semiconductors on February 13, 2024 and sell it today you would earn a total of  145.00  from holding Fidelity Select Semiconductors or generate 4.91% return on investment over 90 days.

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

Wetouch Technology Common  vs.  Fidelity Select Semiconductors

Wetouch Technology Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wetouch Technology Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 Wetouch Technology and Fidelity Select

The main advantage of trading using opposite Wetouch Technology and Fidelity Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wetouch Technology 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 Wetouch Technology Common 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.