Correlation Between Fidelity Advisor and Smallcap World
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Smallcap World 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 Advisor and Smallcap World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Energy and Smallcap World Fund, you can compare the effects of market volatilities on Fidelity Advisor and Smallcap World 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 Advisor with a short position of Smallcap World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Smallcap World.
Diversification Opportunities for Fidelity Advisor and Smallcap World
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Smallcap is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Energy and Smallcap World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap World and Fidelity Advisor 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 Advisor Energy are associated (or correlated) with Smallcap World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap World has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Smallcap World go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Smallcap World
Assuming the 90 days horizon Fidelity Advisor Energy is expected to under-perform the Smallcap World. In addition to that, Fidelity Advisor is 1.78 times more volatile than Smallcap World Fund. It trades about -0.08 of its total potential returns per unit of risk. Smallcap World Fund is currently generating about -0.13 per unit of volatility. If you would invest 6,394 in Smallcap World Fund on November 28, 2024 and sell it today you would lose (149.00) from holding Smallcap World Fund or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Energy vs. Smallcap World Fund
Performance |
| Timeline |
| Fidelity Advisor Energy |
| Smallcap World |
Fidelity Advisor and Smallcap World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Smallcap World
The main advantage of trading using opposite Fidelity Advisor and Smallcap World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Smallcap World 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 Smallcap World will offset losses from the drop in Smallcap World's long position.| Fidelity Advisor vs. T Rowe Price | Fidelity Advisor vs. Cmg Ultra Short | Fidelity Advisor vs. Calvert Short Duration | Fidelity Advisor vs. Transam Short Term Bond |
| Smallcap World vs. Touchstone Large Cap | Smallcap World vs. Lord Abbett Affiliated | Smallcap World vs. Profunds Large Cap Growth | Smallcap World vs. Calvert Large Cap |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |