Correlation Between Fidelity Capital and Growth Opportunities
Can any of the company-specific risk be diversified away by investing in both Fidelity Capital and Growth Opportunities 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 Growth Opportunities 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 Growth Opportunities Fund, you can compare the effects of market volatilities on Fidelity Capital and Growth Opportunities 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 Growth Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and Growth Opportunities.
Diversification Opportunities for Fidelity Capital and Growth Opportunities
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Growth is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and Growth Opportunities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Opportunities 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 Growth Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Opportunities has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and Growth Opportunities go up and down completely randomly.
Pair Corralation between Fidelity Capital and Growth Opportunities
Assuming the 90 days horizon Fidelity Capital is expected to generate 2.83 times less return on investment than Growth Opportunities. But when comparing it to its historical volatility, Fidelity Capital Income is 3.11 times less risky than Growth Opportunities. It trades about 0.14 of its potential returns per unit of risk. Growth Opportunities Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,147 in Growth Opportunities Fund on September 12, 2024 and sell it today you would earn a total of 2,842 from holding Growth Opportunities Fund or generate 90.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Capital Income vs. Growth Opportunities Fund
Performance |
| Timeline |
| Fidelity Capital Income |
| Growth Opportunities |
Fidelity Capital and Growth Opportunities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Capital and Growth Opportunities
The main advantage of trading using opposite Fidelity Capital and Growth Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital position performs unexpectedly, Growth Opportunities 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 Growth Opportunities will offset losses from the drop in Growth Opportunities' 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 |
| Growth Opportunities vs. Fidelity Capital Income | Growth Opportunities vs. Siit High Yield | Growth Opportunities vs. Virtus High Yield | Growth Opportunities vs. Prudential High Yield |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |