Correlation Between Small Cap and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Small Cap and Fidelity Advisor 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 Small Cap and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Value and Fidelity Advisor Mid, you can compare the effects of market volatilities on Small Cap and Fidelity Advisor 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 Small Cap with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Fidelity Advisor.
Diversification Opportunities for Small Cap and Fidelity Advisor
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SMALL and Fidelity is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Value and Fidelity Advisor Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Mid and Small Cap 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 Small Cap Value are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Mid has no effect on the direction of Small Cap i.e., Small Cap and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Small Cap and Fidelity Advisor
Assuming the 90 days horizon Small Cap Value is expected to generate 1.58 times more return on investment than Fidelity Advisor. However, Small Cap is 1.58 times more volatile than Fidelity Advisor Mid. It trades about 0.28 of its potential returns per unit of risk. Fidelity Advisor Mid is currently generating about 0.37 per unit of risk. If you would invest 1,108 in Small Cap Value on September 4, 2024 and sell it today you would earn a total of 111.00 from holding Small Cap Value or generate 10.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Small Cap Value vs. Fidelity Advisor Mid
Performance |
| Timeline |
| Small Cap Value |
| Fidelity Advisor Mid |
Small Cap and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Fidelity Advisor
The main advantage of trading using opposite Small Cap and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Fidelity Advisor 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 Advisor will offset losses from the drop in Fidelity Advisor's long position.| Small Cap vs. Mid Cap Value | Small Cap vs. Equity Growth Fund | Small Cap vs. Income Growth Fund | Small Cap vs. Diversified Bond Fund |
| Fidelity Advisor vs. Fidelity Flex Small | Fidelity Advisor vs. Fidelity Flex International | Fidelity Advisor vs. Fidelity Flex 500 | Fidelity Advisor vs. Fidelity Flex Municipal |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |