Correlation Between Fidelity Mega and Fidelity Salem
Can any of the company-specific risk be diversified away by investing in both Fidelity Mega and Fidelity Salem 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 Mega and Fidelity Salem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Mega Cap and Fidelity Salem Street, you can compare the effects of market volatilities on Fidelity Mega and Fidelity Salem 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 Mega with a short position of Fidelity Salem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Mega and Fidelity Salem.
Diversification Opportunities for Fidelity Mega and Fidelity Salem
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Fidelity is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Mega Cap and Fidelity Salem Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Salem Street and Fidelity Mega 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 Mega Cap are associated (or correlated) with Fidelity Salem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Salem Street has no effect on the direction of Fidelity Mega i.e., Fidelity Mega and Fidelity Salem go up and down completely randomly.
Pair Corralation between Fidelity Mega and Fidelity Salem
Assuming the 90 days horizon Fidelity Mega Cap is expected to generate 0.74 times more return on investment than Fidelity Salem. However, Fidelity Mega Cap is 1.35 times less risky than Fidelity Salem. It trades about 0.16 of its potential returns per unit of risk. Fidelity Salem Street is currently generating about -0.22 per unit of risk. If you would invest 2,518 in Fidelity Mega Cap on August 25, 2024 and sell it today you would earn a total of 121.00 from holding Fidelity Mega Cap or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Mega Cap vs. Fidelity Salem Street
Performance |
| Timeline |
| Fidelity Mega Cap |
| Fidelity Salem Street |
Fidelity Mega and Fidelity Salem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Mega and Fidelity Salem
The main advantage of trading using opposite Fidelity Mega and Fidelity Salem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Mega position performs unexpectedly, Fidelity Salem 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 Salem will offset losses from the drop in Fidelity Salem's long position.| Fidelity Mega vs. Fidelity Large Cap | Fidelity Mega vs. Fidelity Focused Stock | Fidelity Mega vs. Fidelity Stock Selector | Fidelity Mega vs. Fidelity Trend Fund |
| Fidelity Salem vs. Fidelity International Capital | Fidelity Salem vs. Fidelity Total International | Fidelity Salem vs. Fidelity Mega Cap | Fidelity Salem vs. Fidelity International Value |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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