Correlation Between Fidelity Small and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Europacific Growth 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 Europacific Growth 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 Europacific Growth Fund, you can compare the effects of market volatilities on Fidelity Small and Europacific Growth 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 Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Europacific Growth.
Diversification Opportunities for Fidelity Small and Europacific Growth
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Europacific is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific 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 Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Fidelity Small i.e., Fidelity Small and Europacific Growth go up and down completely randomly.
Pair Corralation between Fidelity Small and Europacific Growth
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 2.0 times more return on investment than Europacific Growth. However, Fidelity Small is 2.0 times more volatile than Europacific Growth Fund. It trades about 0.11 of its potential returns per unit of risk. Europacific Growth Fund is currently generating about -0.09 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Europacific Growth Fund
Performance |
| Timeline |
| Fidelity Small Cap |
| Europacific Growth |
Fidelity Small and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Europacific Growth
The main advantage of trading using opposite Fidelity Small and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth'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 |
| Europacific Growth vs. Income Fund Of | Europacific Growth vs. New World Fund | Europacific Growth vs. American Mutual Fund | Europacific Growth vs. American Mutual Fund |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |