Correlation Between Fidelity Advisor and Small Cap
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Small Cap 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 Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Technology and Small Cap Equity, you can compare the effects of market volatilities on Fidelity Advisor and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Small Cap.
Diversification Opportunities for Fidelity Advisor and Small Cap
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Small is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Technology and Small Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Equity 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 Technology are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Equity has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Small Cap go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Small Cap
Assuming the 90 days horizon Fidelity Advisor Technology is expected to under-perform the Small Cap. In addition to that, Fidelity Advisor is 2.2 times more volatile than Small Cap Equity. It trades about -0.17 of its total potential returns per unit of risk. Small Cap Equity is currently generating about 0.17 per unit of volatility. If you would invest 1,785 in Small Cap Equity on October 19, 2024 and sell it today you would earn a total of 54.00 from holding Small Cap Equity or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Fidelity Advisor Technology vs. Small Cap Equity
Performance |
| Timeline |
| Fidelity Advisor Tec |
| Small Cap Equity |
Fidelity Advisor and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Small Cap
The main advantage of trading using opposite Fidelity Advisor and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Fidelity Advisor vs. Fidelity Advisor Financial | Fidelity Advisor vs. Fidelity Advisor Energy | Fidelity Advisor vs. Fidelity Advisor Semiconductors | Fidelity Advisor vs. Fidelity Advisor Growth |
| Small Cap vs. Blackrock Science Technology | Small Cap vs. Technology Ultrasector Profund | Small Cap vs. Fidelity Advisor Technology | Small Cap vs. Specialized Technology Fund |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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