Correlation Between Fidelity Small and Fidelity Canadian
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Fidelity Canadian 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 Fidelity Canadian 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 Fidelity Canadian Growth, you can compare the effects of market volatilities on Fidelity Small and Fidelity Canadian 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 Fidelity Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Fidelity Canadian.
Diversification Opportunities for Fidelity Small and Fidelity Canadian
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Fidelity Canadian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canadian Growth 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 Fidelity Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canadian Growth has no effect on the direction of Fidelity Small i.e., Fidelity Small and Fidelity Canadian go up and down completely randomly.
Pair Corralation between Fidelity Small and Fidelity Canadian
Assuming the 90 days trading horizon Fidelity Small is expected to generate 8.19 times less return on investment than Fidelity Canadian. But when comparing it to its historical volatility, Fidelity Small Cap is 2.29 times less risky than Fidelity Canadian. It trades about 0.1 of its potential returns per unit of risk. Fidelity Canadian Growth is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 10,939 in Fidelity Canadian Growth on August 29, 2024 and sell it today you would earn a total of 691.00 from holding Fidelity Canadian Growth or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Fidelity Canadian Growth
Performance |
| Timeline |
| Fidelity Small Cap |
| Fidelity Canadian Growth |
Fidelity Small and Fidelity Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Fidelity Canadian
The main advantage of trading using opposite Fidelity Small and Fidelity Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Fidelity Canadian 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 Canadian will offset losses from the drop in Fidelity Canadian's long position.| Fidelity Small vs. RBC Select Balanced | Fidelity Small vs. RBC Portefeuille de | Fidelity Small vs. TD Comfort Balanced | Fidelity Small vs. RBC Global Equity |
| Fidelity Canadian vs. RBC Select Balanced | Fidelity Canadian vs. RBC Portefeuille de | Fidelity Canadian vs. TD Comfort Balanced | Fidelity Canadian vs. RBC Global Equity |
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 Stocks Directory module to find actively traded stocks across global markets.
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