Correlation Between Fidelity Small and Pace International
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Pace International 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 Pace International 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 Pace International Equity, you can compare the effects of market volatilities on Fidelity Small and Pace International 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 Pace International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Pace International.
Diversification Opportunities for Fidelity Small and Pace International
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Pace is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Pace International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace International Equity 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 Pace International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace International Equity has no effect on the direction of Fidelity Small i.e., Fidelity Small and Pace International go up and down completely randomly.
Pair Corralation between Fidelity Small and Pace International
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 2.4 times more return on investment than Pace International. However, Fidelity Small is 2.4 times more volatile than Pace International Equity. It trades about 0.18 of its potential returns per unit of risk. Pace International Equity is currently generating about -0.14 per unit of risk. If you would invest 2,550 in Fidelity Small Cap on September 3, 2024 and sell it today you would earn a total of 270.00 from holding Fidelity Small Cap or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Pace International Equity
Performance |
| Timeline |
| Fidelity Small Cap |
| Pace International Equity |
Fidelity Small and Pace International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Pace International
The main advantage of trading using opposite Fidelity Small and Pace International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Pace International 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 Pace International will offset losses from the drop in Pace International'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 |
| Pace International vs. Us Government Securities | Pace International vs. John Hancock Government | Pace International vs. Fidelity Series Government | Pace International vs. Inverse Government Long |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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