Correlation Between Fidelity Capital and Aberdeen Small
Can any of the company-specific risk be diversified away by investing in both Fidelity Capital and Aberdeen Small 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 Capital and Aberdeen Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Capital Income and Aberdeen Small Cap, you can compare the effects of market volatilities on Fidelity Capital and Aberdeen Small 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 Capital with a short position of Aberdeen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and Aberdeen Small.
Diversification Opportunities for Fidelity Capital and Aberdeen Small
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Aberdeen is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and Aberdeen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Small Cap and Fidelity Capital 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 Capital Income are associated (or correlated) with Aberdeen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Small Cap has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and Aberdeen Small go up and down completely randomly.
Pair Corralation between Fidelity Capital and Aberdeen Small
Assuming the 90 days horizon Fidelity Capital is expected to generate 1.0 times less return on investment than Aberdeen Small. But when comparing it to its historical volatility, Fidelity Capital Income is 3.4 times less risky than Aberdeen Small. It trades about 0.14 of its potential returns per unit of risk. Aberdeen Small Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,773 in Aberdeen Small Cap on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Aberdeen Small Cap or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Capital Income vs. Aberdeen Small Cap
Performance |
| Timeline |
| Fidelity Capital Income |
| Aberdeen Small Cap |
Fidelity Capital and Aberdeen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Capital and Aberdeen Small
The main advantage of trading using opposite Fidelity Capital and Aberdeen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital position performs unexpectedly, Aberdeen Small 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 Aberdeen Small will offset losses from the drop in Aberdeen Small's long position.| Fidelity Capital vs. Vanguard High Yield Corporate | Fidelity Capital vs. Vanguard High Yield Porate | Fidelity Capital vs. Blackrock Hi Yld | Fidelity Capital vs. Blackrock High Yield |
| Aberdeen Small vs. Guggenheim Managed Futures | Aberdeen Small vs. Loomis Sayles Inflation | Aberdeen Small vs. Ab Bond Inflation | Aberdeen Small vs. Short Duration Inflation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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