Correlation Between Fidelity Sai and Alger Small
Can any of the company-specific risk be diversified away by investing in both Fidelity Sai and Alger 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 Sai and Alger Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Sai Inflationfocused and Alger Small Cap, you can compare the effects of market volatilities on Fidelity Sai and Alger 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 Sai with a short position of Alger Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sai and Alger Small.
Diversification Opportunities for Fidelity Sai and Alger Small
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidelity and Alger is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai Inflationfocused and Alger Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Small Cap and Fidelity Sai 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 Sai Inflationfocused are associated (or correlated) with Alger Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Small Cap has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and Alger Small go up and down completely randomly.
Pair Corralation between Fidelity Sai and Alger Small
Assuming the 90 days horizon Fidelity Sai is expected to generate 1.25 times less return on investment than Alger Small. But when comparing it to its historical volatility, Fidelity Sai Inflationfocused is 1.57 times less risky than Alger Small. It trades about 0.17 of its potential returns per unit of risk. Alger Small Cap is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,971 in Alger Small Cap on September 15, 2024 and sell it today you would earn a total of 69.00 from holding Alger Small Cap or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Sai Inflationfocused vs. Alger Small Cap
Performance |
| Timeline |
| Fidelity Sai Inflati |
| Alger Small Cap |
Fidelity Sai and Alger Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Sai and Alger Small
The main advantage of trading using opposite Fidelity Sai and Alger Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Sai position performs unexpectedly, Alger 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 Alger Small will offset losses from the drop in Alger Small's long position.| Fidelity Sai vs. Fidelity Freedom 2015 | Fidelity Sai vs. Fidelity Puritan Fund | Fidelity Sai vs. Fidelity Puritan Fund | Fidelity Sai vs. Fidelity Pennsylvania Municipal |
| Alger Small vs. Loomis Sayles Inflation | Alger Small vs. Lord Abbett Inflation | Alger Small vs. Fidelity Sai Inflationfocused | Alger Small vs. Goldman Sachs Inflation |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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