Correlation Between Fidelity Small and Acrex
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Acrex 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 Acrex 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 Acrex, you can compare the effects of market volatilities on Fidelity Small and Acrex 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 Acrex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Acrex.
Diversification Opportunities for Fidelity Small and Acrex
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Acrex is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Acrex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acrex 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 Acrex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acrex has no effect on the direction of Fidelity Small i.e., Fidelity Small and Acrex go up and down completely randomly.
Pair Corralation between Fidelity Small and Acrex
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.28 times more return on investment than Acrex. However, Fidelity Small is 1.28 times more volatile than Acrex. It trades about 0.03 of its potential returns per unit of risk. Acrex is currently generating about -0.05 per unit of risk. If you would invest 2,128 in Fidelity Small Cap on September 28, 2024 and sell it today you would earn a total of 434.00 from holding Fidelity Small Cap or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.31% |
| Values | Daily Returns |
Fidelity Small Cap vs. Acrex
Performance |
| Timeline |
| Fidelity Small Cap |
| Acrex |
Fidelity Small and Acrex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Acrex
The main advantage of trading using opposite Fidelity Small and Acrex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Acrex 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 Acrex will offset losses from the drop in Acrex's long position.| Fidelity Small vs. Fidelity Freedom 2015 | Fidelity Small vs. Fidelity Puritan Fund | Fidelity Small vs. Fidelity Puritan Fund | Fidelity Small vs. Fidelity Pennsylvania Municipal |
| Acrex vs. Lord Abbett Small | Acrex vs. Fidelity Small Cap | Acrex vs. Applied Finance Explorer | Acrex vs. Heartland Value Plus |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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