Correlation Between Fidelity Small and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Alger Capital 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 Alger Capital 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 Alger Capital Appreciation, you can compare the effects of market volatilities on Fidelity Small and Alger Capital 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 Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Alger Capital.
Diversification Opportunities for Fidelity Small and Alger Capital
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Alger is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Alger Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Capital Apprec 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 Alger Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Capital Apprec has no effect on the direction of Fidelity Small i.e., Fidelity Small and Alger Capital go up and down completely randomly.
Pair Corralation between Fidelity Small and Alger Capital
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 5.41 times more return on investment than Alger Capital. However, Fidelity Small is 5.41 times more volatile than Alger Capital Appreciation. It trades about 0.23 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.0 per unit of risk. If you would invest 2,620 in Fidelity Small Cap on August 28, 2024 and sell it today you would earn a total of 218.00 from holding Fidelity Small Cap or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Alger Capital Appreciation
Performance |
| Timeline |
| Fidelity Small Cap |
| Alger Capital Apprec |
Fidelity Small and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Alger Capital
The main advantage of trading using opposite Fidelity Small and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Alger Capital 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 Capital will offset losses from the drop in Alger Capital's long position.| Fidelity Small vs. Fidelity Large Cap | Fidelity Small vs. Fidelity Emerging Markets | Fidelity Small vs. Aquagold International | Fidelity Small vs. Morningstar Unconstrained Allocation |
| Alger Capital vs. Rbc Small Cap | Alger Capital vs. Rbc Enterprise Fund | Alger Capital vs. Rbc Enterprise Fund | Alger Capital vs. Rbc Emerging Markets |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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