Correlation Between Fidelity Small and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Mid 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 Small and Mid Cap 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 Mid Cap Growth Profund, you can compare the effects of market volatilities on Fidelity Small and Mid 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 Small with a short position of Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Mid Cap.
Diversification Opportunities for Fidelity Small and Mid Cap
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Mid is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Mid Cap Growth Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Growth 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 Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Growth has no effect on the direction of Fidelity Small i.e., Fidelity Small and Mid Cap go up and down completely randomly.
Pair Corralation between Fidelity Small and Mid Cap
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.44 times more return on investment than Mid Cap. However, Fidelity Small is 1.44 times more volatile than Mid Cap Growth Profund. It trades about 0.11 of its potential returns per unit of risk. Mid Cap Growth Profund is currently generating about 0.07 per unit of risk. If you would invest 2,617 in Fidelity Small Cap on September 13, 2024 and sell it today you would earn a total of 160.00 from holding Fidelity Small Cap or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Mid Cap Growth Profund
Performance |
| Timeline |
| Fidelity Small Cap |
| Mid Cap Growth |
Fidelity Small and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Mid Cap
The main advantage of trading using opposite Fidelity Small and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Mid 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 Mid Cap will offset losses from the drop in Mid Cap'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 |
| Mid Cap vs. Small Cap Growth Profund | Mid Cap vs. Mid Cap Value Profund | Mid Cap vs. Small Cap Value Profund | Mid Cap vs. Mid Cap Profund Mid 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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