Correlation Between Fidelity Small and Domini International
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Domini International 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 Domini International 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 Domini International Opportunities, you can compare the effects of market volatilities on Fidelity Small and Domini International 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 Domini International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Domini International.
Diversification Opportunities for Fidelity Small and Domini International
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Domini is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Domini International Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Domini International 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 Domini International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Domini International has no effect on the direction of Fidelity Small i.e., Fidelity Small and Domini International go up and down completely randomly.
Pair Corralation between Fidelity Small and Domini International
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.73 times more return on investment than Domini International. However, Fidelity Small is 1.73 times more volatile than Domini International Opportunities. It trades about 0.29 of its potential returns per unit of risk. Domini International Opportunities is currently generating about -0.05 per unit of risk. If you would invest 3,394 in Fidelity Small Cap on September 4, 2024 and sell it today you would earn a total of 292.00 from holding Fidelity Small Cap or generate 8.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fidelity Small Cap vs. Domini International Opportuni
Performance |
| Timeline |
| Fidelity Small Cap |
| Domini International |
Fidelity Small and Domini International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Domini International
The main advantage of trading using opposite Fidelity Small and Domini International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Domini International 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 Domini International will offset losses from the drop in Domini International's long position.| Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Small Cap |
| Domini International vs. Cornerstone Advisors Real | Domini International vs. Domini Impact International | Domini International vs. Domini Impact Bond | Domini International vs. Domini Impact 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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