Correlation Between Fidelity Small and Wasatch Ultra
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Wasatch Ultra 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 Wasatch Ultra 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 Wasatch Ultra Growth, you can compare the effects of market volatilities on Fidelity Small and Wasatch Ultra 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 Wasatch Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Wasatch Ultra.
Diversification Opportunities for Fidelity Small and Wasatch Ultra
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Wasatch is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Wasatch Ultra Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Ultra 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 Wasatch Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Ultra Growth has no effect on the direction of Fidelity Small i.e., Fidelity Small and Wasatch Ultra go up and down completely randomly.
Pair Corralation between Fidelity Small and Wasatch Ultra
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.04 times more return on investment than Wasatch Ultra. However, Fidelity Small is 1.04 times more volatile than Wasatch Ultra Growth. It trades about 0.33 of its potential returns per unit of risk. Wasatch Ultra Growth is currently generating about 0.32 per unit of risk. If you would invest 3,357 in Fidelity Small Cap on September 1, 2024 and sell it today you would earn a total of 338.00 from holding Fidelity Small Cap or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Small Cap vs. Wasatch Ultra Growth
Performance |
| Timeline |
| Fidelity Small Cap |
| Wasatch Ultra Growth |
Fidelity Small and Wasatch Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Wasatch Ultra
The main advantage of trading using opposite Fidelity Small and Wasatch Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Wasatch Ultra 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 Wasatch Ultra will offset losses from the drop in Wasatch Ultra'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 |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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