Correlation Between Fidelity Small and Templeton Foreign
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Templeton Foreign 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 Templeton Foreign 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 Templeton Foreign Fund, you can compare the effects of market volatilities on Fidelity Small and Templeton Foreign 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 Templeton Foreign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Templeton Foreign.
Diversification Opportunities for Fidelity Small and Templeton Foreign
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Templeton is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Templeton Foreign Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Foreign 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 Templeton Foreign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Foreign has no effect on the direction of Fidelity Small i.e., Fidelity Small and Templeton Foreign go up and down completely randomly.
Pair Corralation between Fidelity Small and Templeton Foreign
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.63 times more return on investment than Templeton Foreign. However, Fidelity Small is 1.63 times more volatile than Templeton Foreign Fund. It trades about 0.23 of its potential returns per unit of risk. Templeton Foreign Fund is currently generating about -0.14 per unit of risk. If you would invest 2,620 in Fidelity Small Cap on August 28, 2024 and sell it today you would earn a total of 218.00 from holding Fidelity Small Cap or generate 8.32% 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. Templeton Foreign Fund
Performance |
| Timeline |
| Fidelity Small Cap |
| Templeton Foreign |
Fidelity Small and Templeton Foreign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Templeton Foreign
The main advantage of trading using opposite Fidelity Small and Templeton Foreign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Templeton Foreign 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 Templeton Foreign will offset losses from the drop in Templeton Foreign'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 |
| Templeton Foreign vs. California High Yield Municipal | Templeton Foreign vs. Ishares Municipal Bond | Templeton Foreign vs. Ab Impact Municipal | Templeton Foreign vs. Oklahoma Municipal 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |