Correlation Between Growth Fund and Fidelity Large
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Fidelity Large 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 Growth Fund and Fidelity Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Fidelity Large Cap, you can compare the effects of market volatilities on Growth Fund and Fidelity Large 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 Growth Fund with a short position of Fidelity Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Fidelity Large.
Diversification Opportunities for Growth Fund and Fidelity Large
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Growth and FIDELITY is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Fidelity Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Large Cap and Growth Fund 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 Growth Fund Of are associated (or correlated) with Fidelity Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Large Cap has no effect on the direction of Growth Fund i.e., Growth Fund and Fidelity Large go up and down completely randomly.
Pair Corralation between Growth Fund and Fidelity Large
Assuming the 90 days horizon Growth Fund is expected to generate 1.51 times less return on investment than Fidelity Large. But when comparing it to its historical volatility, Growth Fund Of is 1.0 times less risky than Fidelity Large. It trades about 0.08 of its potential returns per unit of risk. Fidelity Large Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,432 in Fidelity Large Cap on September 3, 2024 and sell it today you would earn a total of 511.00 from holding Fidelity Large Cap or generate 21.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 30.91% |
| Values | Daily Returns |
Growth Fund Of vs. Fidelity Large Cap
Performance |
| Timeline |
| Growth Fund |
| Fidelity Large Cap |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Growth Fund and Fidelity Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Fidelity Large
The main advantage of trading using opposite Growth Fund and Fidelity Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Fidelity Large 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 Large will offset losses from the drop in Fidelity Large's long position.| Growth Fund vs. Aig Government Money | Growth Fund vs. Matson Money Equity | Growth Fund vs. John Hancock Money | Growth Fund vs. Transamerica Funds |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Global Correlations Find global opportunities by holding instruments from different markets |