Correlation Between Fidelity Small and Fidelity Stock
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Fidelity Stock 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 Small and Fidelity Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Small Cap and Fidelity Stock Selector, you can compare the effects of market volatilities on Fidelity Small and Fidelity Stock 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 Small with a short position of Fidelity Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Fidelity Stock.
Diversification Opportunities for Fidelity Small and Fidelity Stock
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Fidelity Stock Selector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Stock Selector and Fidelity Small 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 Small Cap are associated (or correlated) with Fidelity Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Stock Selector has no effect on the direction of Fidelity Small i.e., Fidelity Small and Fidelity Stock go up and down completely randomly.
Pair Corralation between Fidelity Small and Fidelity Stock
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.82 times more return on investment than Fidelity Stock. However, Fidelity Small is 1.82 times more volatile than Fidelity Stock Selector. It trades about 0.15 of its potential returns per unit of risk. Fidelity Stock Selector is currently generating about 0.12 per unit of risk. If you would invest 3,357 in Fidelity Small Cap on August 24, 2024 and sell it today you would earn a total of 145.00 from holding Fidelity Small Cap or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Fidelity Stock Selector
Performance |
| Timeline |
| Fidelity Small Cap |
| Fidelity Stock Selector |
Fidelity Small and Fidelity Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Fidelity Stock
The main advantage of trading using opposite Fidelity Small and Fidelity Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Fidelity Stock 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 Stock will offset losses from the drop in Fidelity Stock's long position.| Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Mid Cap | Fidelity Small vs. Fidelity Growth Discovery | Fidelity Small vs. Fidelity Focused Stock |
| Fidelity Stock vs. Fidelity Mid Cap | Fidelity Stock vs. Fidelity Blue Chip | Fidelity Stock vs. Fidelity Value Discovery | Fidelity Stock vs. Fidelity Stock Selector |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |