Correlation Between Fidelity Small and Great West
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Great West 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 Great West 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 Great West Loomis Sayles, you can compare the effects of market volatilities on Fidelity Small and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Great West.
Diversification Opportunities for Fidelity Small and Great West
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Great is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Great West Loomis Sayles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Loomis 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Loomis has no effect on the direction of Fidelity Small i.e., Fidelity Small and Great West go up and down completely randomly.
Pair Corralation between Fidelity Small and Great West
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.11 times more return on investment than Great West. However, Fidelity Small is 1.11 times more volatile than Great West Loomis Sayles. It trades about 0.03 of its potential returns per unit of risk. Great West Loomis Sayles is currently generating about 0.04 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 Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Great West Loomis Sayles
Performance |
| Timeline |
| Fidelity Small Cap |
| Great West Loomis |
Fidelity Small and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Great West
The main advantage of trading using opposite Fidelity Small and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West'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 |
| Great West vs. Great West Securefoundation Balanced | Great West vs. Great West Lifetime 2020 | Great West vs. Great West Lifetime 2020 | Great West vs. Great West Lifetime 2020 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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