Correlation Between Fidelity Growth and Fidelity Contrafund
Can any of the company-specific risk be diversified away by investing in both Fidelity Growth and Fidelity Contrafund 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 Growth and Fidelity Contrafund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Growth Strategies and Fidelity Contrafund, you can compare the effects of market volatilities on Fidelity Growth and Fidelity Contrafund 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 Growth with a short position of Fidelity Contrafund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Growth and Fidelity Contrafund.
Diversification Opportunities for Fidelity Growth and Fidelity Contrafund
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Growth Strategies and Fidelity Contrafund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Contrafund and Fidelity Growth 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 Growth Strategies are associated (or correlated) with Fidelity Contrafund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Contrafund has no effect on the direction of Fidelity Growth i.e., Fidelity Growth and Fidelity Contrafund go up and down completely randomly.
Pair Corralation between Fidelity Growth and Fidelity Contrafund
Assuming the 90 days horizon Fidelity Growth Strategies is expected to generate 1.26 times more return on investment than Fidelity Contrafund. However, Fidelity Growth is 1.26 times more volatile than Fidelity Contrafund. It trades about 0.25 of its potential returns per unit of risk. Fidelity Contrafund is currently generating about 0.1 per unit of risk. If you would invest 6,392 in Fidelity Growth Strategies on August 26, 2024 and sell it today you would earn a total of 1,303 from holding Fidelity Growth Strategies or generate 20.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Growth Strategies vs. Fidelity Contrafund
Performance |
| Timeline |
| Fidelity Growth Stra |
| Fidelity Contrafund |
Fidelity Growth and Fidelity Contrafund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Growth and Fidelity Contrafund
The main advantage of trading using opposite Fidelity Growth and Fidelity Contrafund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Growth position performs unexpectedly, Fidelity Contrafund 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 Contrafund will offset losses from the drop in Fidelity Contrafund's long position.| Fidelity Growth vs. Fidelity Dividend Growth | Fidelity Growth vs. Fidelity Blue Chip | Fidelity Growth vs. Fidelity Mid Cap Stock | Fidelity Growth vs. Fidelity Growth Income |
| Fidelity Contrafund vs. Lord Abbett Growth | Fidelity Contrafund vs. Fidelity Advisor Growth | Fidelity Contrafund vs. Aquagold International | Fidelity Contrafund vs. Morningstar Unconstrained Allocation |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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