Correlation Between Fidelity New and Lkcm Small
Can any of the company-specific risk be diversified away by investing in both Fidelity New and Lkcm 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 New and Lkcm Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity New Markets and Lkcm Small Cap, you can compare the effects of market volatilities on Fidelity New and Lkcm 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 New with a short position of Lkcm Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Lkcm Small.
Diversification Opportunities for Fidelity New and Lkcm Small
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fidelity and Lkcm is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Markets and Lkcm Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Small Cap and Fidelity New 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 New Markets are associated (or correlated) with Lkcm Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Small Cap has no effect on the direction of Fidelity New i.e., Fidelity New and Lkcm Small go up and down completely randomly.
Pair Corralation between Fidelity New and Lkcm Small
Assuming the 90 days horizon Fidelity New Markets is expected to generate 0.2 times more return on investment than Lkcm Small. However, Fidelity New Markets is 5.04 times less risky than Lkcm Small. It trades about -0.38 of its potential returns per unit of risk. Lkcm Small Cap is currently generating about -0.09 per unit of risk. If you would invest 1,285 in Fidelity New Markets on January 13, 2025 and sell it today you would lose (63.00) from holding Fidelity New Markets or give up 4.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity New Markets vs. Lkcm Small Cap
Performance |
| Timeline |
| Fidelity New Markets |
| Lkcm Small Cap |
Fidelity New and Lkcm Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity New and Lkcm Small
The main advantage of trading using opposite Fidelity New and Lkcm Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New position performs unexpectedly, Lkcm 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 Lkcm Small will offset losses from the drop in Lkcm Small's long position.| Fidelity New vs. Columbia Global Technology | Fidelity New vs. Global Technology Portfolio | Fidelity New vs. Blackrock Science Technology | Fidelity New vs. Fidelity Advisor Technology |
| Lkcm Small vs. Putnam Diversified Income | Lkcm Small vs. Federated Hermes Conservative | Lkcm Small vs. Oppenheimer International Diversified | Lkcm Small vs. Prudential Core Conservative |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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