Correlation Between Fidelity Small and Capital World
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Capital 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 Small and Capital World 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 Capital World Bond, you can compare the effects of market volatilities on Fidelity Small and Capital 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 Small with a short position of Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Capital World.
Diversification Opportunities for Fidelity Small and Capital World
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Capital is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Capital World Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Bond 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 Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Bond has no effect on the direction of Fidelity Small i.e., Fidelity Small and Capital World go up and down completely randomly.
Pair Corralation between Fidelity Small and Capital World
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 3.62 times more return on investment than Capital World. However, Fidelity Small is 3.62 times more volatile than Capital World Bond. It trades about 0.07 of its potential returns per unit of risk. Capital World Bond is currently generating about 0.01 per unit of risk. If you would invest 2,347 in Fidelity Small Cap on September 3, 2024 and sell it today you would earn a total of 473.00 from holding Fidelity Small Cap or generate 20.15% 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. Capital World Bond
Performance |
| Timeline |
| Fidelity Small Cap |
| Capital World Bond |
Fidelity Small and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Capital World
The main advantage of trading using opposite Fidelity Small and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Capital 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 Capital World will offset losses from the drop in Capital World's long position.| Fidelity Small vs. Fidelity Large Cap | Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Mid Cap | Fidelity Small vs. Fidelity Mid Cap |
| Capital World vs. Rbc Emerging Markets | Capital World vs. Transamerica Emerging Markets | Capital World vs. Templeton Developing Markets | Capital World vs. Morgan Stanley Emerging |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |