Correlation Between Fidelity Small and Fidelity Focused
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Fidelity Focused 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 Focused 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 Focused Stock, you can compare the effects of market volatilities on Fidelity Small and Fidelity Focused 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 Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Fidelity Focused.
Diversification Opportunities for Fidelity Small and Fidelity Focused
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Fidelity Focused Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Focused Stock 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 Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Focused Stock has no effect on the direction of Fidelity Small i.e., Fidelity Small and Fidelity Focused go up and down completely randomly.
Pair Corralation between Fidelity Small and Fidelity Focused
Assuming the 90 days horizon Fidelity Small is expected to generate 1.3 times less return on investment than Fidelity Focused. In addition to that, Fidelity Small is 1.0 times more volatile than Fidelity Focused Stock. It trades about 0.07 of its total potential returns per unit of risk. Fidelity Focused Stock is currently generating about 0.09 per unit of volatility. If you would invest 2,606 in Fidelity Focused Stock on August 24, 2024 and sell it today you would earn a total of 1,621 from holding Fidelity Focused Stock or generate 62.2% 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 Focused Stock
Performance |
| Timeline |
| Fidelity Small Cap |
| Fidelity Focused Stock |
Fidelity Small and Fidelity Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Fidelity Focused
The main advantage of trading using opposite Fidelity Small and Fidelity Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Fidelity Focused 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 Focused will offset losses from the drop in Fidelity Focused'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 Focused vs. Fidelity Trend Fund | Fidelity Focused vs. Fidelity Large Cap | Fidelity Focused vs. Fidelity Growth Discovery | Fidelity Focused vs. Fidelity Mega Cap |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| 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 | |
| Stocks Directory Find actively traded stocks across global markets |