Correlation Between Fidelity Small and Jhancock Multi-index
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Jhancock Multi-index 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 Jhancock Multi-index 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 Jhancock Multi Index 2065, you can compare the effects of market volatilities on Fidelity Small and Jhancock Multi-index 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 Jhancock Multi-index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Jhancock Multi-index.
Diversification Opportunities for Fidelity Small and Jhancock Multi-index
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Jhancock is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Jhancock Multi Index 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Multi Index 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 Jhancock Multi-index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Multi Index has no effect on the direction of Fidelity Small i.e., Fidelity Small and Jhancock Multi-index go up and down completely randomly.
Pair Corralation between Fidelity Small and Jhancock Multi-index
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.24 times more return on investment than Jhancock Multi-index. However, Fidelity Small is 1.24 times more volatile than Jhancock Multi Index 2065. It trades about 0.25 of its potential returns per unit of risk. Jhancock Multi Index 2065 is currently generating about 0.2 per unit of risk. If you would invest 2,036 in Fidelity Small Cap on November 1, 2024 and sell it today you would earn a total of 88.00 from holding Fidelity Small Cap or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Jhancock Multi Index 2065
Performance |
| Timeline |
| Fidelity Small Cap |
| Jhancock Multi Index |
Fidelity Small and Jhancock Multi-index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Jhancock Multi-index
The main advantage of trading using opposite Fidelity Small and Jhancock Multi-index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Jhancock Multi-index 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 Jhancock Multi-index will offset losses from the drop in Jhancock Multi-index's long position.| Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Mid Cap | Fidelity Small vs. Fidelity Advisor Value |
| Jhancock Multi-index vs. Fidelity Small Cap | Jhancock Multi-index vs. Victory Rs Partners | Jhancock Multi-index vs. Lsv Small Cap | Jhancock Multi-index vs. Mid Cap Growth Profund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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