Correlation Between Fidelity Stock and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Fidelity Stock and Mid Cap 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 Stock and Mid Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Stock Selector and Mid Cap Spdr, you can compare the effects of market volatilities on Fidelity Stock and Mid Cap 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 Stock with a short position of Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Stock and Mid Cap.
Diversification Opportunities for Fidelity Stock and Mid Cap
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FIDELITY and Mid is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Stock Selector and Mid Cap Spdr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Spdr and Fidelity Stock 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 Stock Selector are associated (or correlated) with Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Spdr has no effect on the direction of Fidelity Stock i.e., Fidelity Stock and Mid Cap go up and down completely randomly.
Pair Corralation between Fidelity Stock and Mid Cap
Assuming the 90 days horizon Fidelity Stock is expected to generate 1.34 times less return on investment than Mid Cap. But when comparing it to its historical volatility, Fidelity Stock Selector is 1.6 times less risky than Mid Cap. It trades about 0.32 of its potential returns per unit of risk. Mid Cap Spdr is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 57,307 in Mid Cap Spdr on August 31, 2024 and sell it today you would earn a total of 4,158 from holding Mid Cap Spdr or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Stock Selector vs. Mid Cap Spdr
Performance |
| Timeline |
| Fidelity Stock Selector |
| Mid Cap Spdr |
Fidelity Stock and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Stock and Mid Cap
The main advantage of trading using opposite Fidelity Stock and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Stock position performs unexpectedly, Mid Cap 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 Mid Cap will offset losses from the drop in Mid Cap's long position.| Fidelity Stock vs. Nasdaq 100 Index Fund | Fidelity Stock vs. Artisan Thematic Fund | Fidelity Stock vs. Semiconductor Ultrasector Profund | Fidelity Stock vs. Balanced Fund Investor |
| Mid Cap vs. Huber Capital Diversified | Mid Cap vs. Harbor Diversified International | Mid Cap vs. Fidelity Advisor Diversified | Mid Cap vs. Blackrock Conservative Prprdptfinstttnl |
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 Stocks Directory module to find actively traded stocks across global markets.
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