Correlation Between Fidelity Small and Aig Government
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Aig Government 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 Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Fidelity Small and Aig Government 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 Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Aig Government.
Diversification Opportunities for Fidelity Small and Aig Government
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Aig is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Fidelity Small i.e., Fidelity Small and Aig Government go up and down completely randomly.
Pair Corralation between Fidelity Small and Aig Government
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 6.59 times more return on investment than Aig Government. However, Fidelity Small is 6.59 times more volatile than Aig Government Money. It trades about 0.2 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.17 per unit of risk. If you would invest 2,066 in Fidelity Small Cap on August 30, 2024 and sell it today you would earn a total of 155.00 from holding Fidelity Small Cap or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fidelity Small Cap vs. Aig Government Money
Performance |
| Timeline |
| Fidelity Small Cap |
| Aig Government Money |
Fidelity Small and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Aig Government
The main advantage of trading using opposite Fidelity Small and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Fidelity Small vs. Aig Government Money | Fidelity Small vs. Dreyfus Government Cash | Fidelity Small vs. Federated Government Ultrashort | Fidelity Small vs. Dws Government Money |
| Aig Government vs. Simt Multi Asset Accumulation | Aig Government vs. Simt Real Return | Aig Government vs. Simt Small Cap | Aig Government vs. Siit Screened World |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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