Correlation Between Fidelity Value and Fidelity Mid-cap
Can any of the company-specific risk be diversified away by investing in both Fidelity Value and Fidelity Mid-cap 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 Value and Fidelity Mid-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Value Fund and Fidelity Mid Cap Stock, you can compare the effects of market volatilities on Fidelity Value and Fidelity Mid-cap 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 Value with a short position of Fidelity Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Value and Fidelity Mid-cap.
Diversification Opportunities for Fidelity Value and Fidelity Mid-cap
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Value Fund and Fidelity Mid Cap Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Mid Cap and Fidelity Value 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 Value Fund are associated (or correlated) with Fidelity Mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Mid Cap has no effect on the direction of Fidelity Value i.e., Fidelity Value and Fidelity Mid-cap go up and down completely randomly.
Pair Corralation between Fidelity Value and Fidelity Mid-cap
Assuming the 90 days horizon Fidelity Value Fund is expected to generate 1.17 times more return on investment than Fidelity Mid-cap. However, Fidelity Value is 1.17 times more volatile than Fidelity Mid Cap Stock. It trades about 0.06 of its potential returns per unit of risk. Fidelity Mid Cap Stock is currently generating about 0.05 per unit of risk. If you would invest 1,241 in Fidelity Value Fund on September 3, 2024 and sell it today you would earn a total of 469.00 from holding Fidelity Value Fund or generate 37.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Value Fund vs. Fidelity Mid Cap Stock
Performance |
| Timeline |
| Fidelity Value |
| Fidelity Mid Cap |
Fidelity Value and Fidelity Mid-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Value and Fidelity Mid-cap
The main advantage of trading using opposite Fidelity Value and Fidelity Mid-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Value position performs unexpectedly, Fidelity Mid-cap 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 Mid-cap will offset losses from the drop in Fidelity Mid-cap's long position.| Fidelity Value vs. Fidelity Mid Cap Stock | Fidelity Value vs. Fidelity Low Priced Stock | Fidelity Value vs. Fidelity International Discovery | Fidelity Value vs. Fidelity Capital Appreciation |
| Fidelity Mid-cap vs. Fidelity Dividend Growth | Fidelity Mid-cap vs. Fidelity Diversified International | Fidelity Mid-cap vs. Fidelity Value Fund | Fidelity Mid-cap vs. Fidelity Low Priced Stock |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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