Correlation Between Fidelity Small and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Growth Strategy 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 Growth Strategy 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 Growth Strategy Fund, you can compare the effects of market volatilities on Fidelity Small and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Growth Strategy.
Diversification Opportunities for Fidelity Small and Growth Strategy
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Growth is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Fidelity Small i.e., Fidelity Small and Growth Strategy go up and down completely randomly.
Pair Corralation between Fidelity Small and Growth Strategy
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 2.98 times more return on investment than Growth Strategy. However, Fidelity Small is 2.98 times more volatile than Growth Strategy Fund. It trades about 0.23 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.1 per unit of risk. If you would invest 2,575 in Fidelity Small Cap on August 26, 2024 and sell it today you would earn a total of 220.00 from holding Fidelity Small Cap or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Growth Strategy Fund
Performance |
| Timeline |
| Fidelity Small Cap |
| Growth Strategy |
Fidelity Small and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Growth Strategy
The main advantage of trading using opposite Fidelity Small and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy's long position.| Fidelity Small vs. Fidelity Large Cap | Fidelity Small vs. Fidelity Emerging Markets | Fidelity Small vs. Aquagold International | Fidelity Small vs. Morningstar Unconstrained Allocation |
| Growth Strategy vs. Queens Road Small | Growth Strategy vs. Small Cap Value Series | Growth Strategy vs. Northern Small Cap | Growth Strategy vs. Fidelity Small 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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