Correlation Between Fidelity All and Dynamic Active

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

By analyzing existing cross correlation between Fidelity All in One Balanced and Dynamic Active Retirement, you can compare the effects of market volatilities on Fidelity All and Dynamic Active 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 All with a short position of Dynamic Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity All and Dynamic Active.

Diversification Opportunities for Fidelity All and Dynamic Active

0.67

Correlation Coefficient

Fidelity All  Dynamic Active

Poor diversification

The 3 months correlation between Fidelity and Dynamic is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity All in One Balanced and Dynamic Active Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Active Retirement and Fidelity All 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 All in One Balanced are associated (or correlated) with Dynamic Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Active Retirement has no effect on the direction of Fidelity All i.e., Fidelity All and Dynamic Active go up and down completely randomly.

Pair Corralation between Fidelity All and Dynamic Active

Assuming the 90 days trading horizon Fidelity All is expected to generate 1.15 times less return on investment than Dynamic Active. In addition to that, Fidelity All is 1.22 times more volatile than Dynamic Active Retirement. It trades about 0.24 of its total potential returns per unit of risk. Dynamic Active Retirement is currently generating about 0.34 per unit of volatility. If you would invest  2,175  in Dynamic Active Retirement on April 23, 2025 and sell it today you would earn a total of  158.00  from holding Dynamic Active Retirement or generate 7.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Fidelity All in One Balanced  vs.  Dynamic Active Retirement

Fidelity All in

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity All in One Balanced are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Fidelity All is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Dynamic Active Retirement

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dynamic Active Retirement are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dynamic Active may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Fidelity All and Dynamic Active

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

The idea behind Fidelity All in One Balanced and Dynamic Active Retirement 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 Stocks Directory module to find actively traded stocks across global markets.