Correlation Between Fidelity Small and Ab Small
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Ab 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 Small and Ab Small 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 Ab Small Cap, you can compare the effects of market volatilities on Fidelity Small and Ab 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 Small with a short position of Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Ab Small.
Diversification Opportunities for Fidelity Small and Ab Small
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and SCYVX is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Fidelity Small i.e., Fidelity Small and Ab Small go up and down completely randomly.
Pair Corralation between Fidelity Small and Ab Small
Assuming the 90 days horizon Fidelity Small is expected to generate 1.77 times less return on investment than Ab Small. But when comparing it to its historical volatility, Fidelity Small Cap is 1.07 times less risky than Ab Small. It trades about 0.02 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,474 in Ab Small Cap on November 2, 2024 and sell it today you would earn a total of 41.00 from holding Ab Small Cap or generate 2.78% 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. Ab Small Cap
Performance |
| Timeline |
| Fidelity Small Cap |
| Ab Small Cap |
Fidelity Small and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Ab Small
The main advantage of trading using opposite Fidelity Small and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Ab 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 Ab Small will offset losses from the drop in Ab Small'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 |
| Ab Small vs. T Rowe Price | Ab Small vs. Tfa Quantitative | Ab Small vs. Western Asset Adjustable | Ab Small vs. Scharf Global Opportunity |
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.
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