Correlation Between Fidelity Health and Howard Bancorp

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Can any of the company-specific risk be diversified away by investing in both Fidelity Health and Howard Bancorp 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 Health and Howard Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Health Care and Howard Bancorp, you can compare the effects of market volatilities on Fidelity Health and Howard Bancorp 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 Health with a short position of Howard Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Health and Howard Bancorp.

Diversification Opportunities for Fidelity Health and Howard Bancorp

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Fidelity and Howard is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Health Care and Howard Bancorp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Howard Bancorp and Fidelity Health 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 Health Care are associated (or correlated) with Howard Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Howard Bancorp has no effect on the direction of Fidelity Health i.e., Fidelity Health and Howard Bancorp go up and down completely randomly.

Pair Corralation between Fidelity Health and Howard Bancorp

If you would invest  2,330  in Howard Bancorp on February 20, 2022 and sell it today you would earn a total of  0.00  from holding Howard Bancorp or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy4.55%
ValuesDaily Returns

Fidelity Health Care  vs.  Howard Bancorp Inc

 Performance (%) 
      Timeline 
Fidelity Health Care 
Fidelity Performance
0 of 100
Over the last 90 days Fidelity Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Fidelity Health is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Price Channel

Howard Bancorp 
Howard Performance
0 of 100
Over the last 90 days Howard Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Howard Bancorp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Fidelity Health and Howard Bancorp Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Fidelity Health and Howard Bancorp

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

Fidelity Health Care

Pair trading matchups for Fidelity Health

The idea behind Fidelity Health Care and Howard Bancorp 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.

Howard Bancorp

Pair trading matchups for Howard Bancorp

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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