Correlation Between Fidelity Magellan and Fidelity Growth
Can any of the company-specific risk be diversified away by investing in both Fidelity Magellan and Fidelity 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 Magellan and Fidelity Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Magellan Fund and Fidelity Growth Income, you can compare the effects of market volatilities on Fidelity Magellan and Fidelity 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 Magellan with a short position of Fidelity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Magellan and Fidelity Growth.
Diversification Opportunities for Fidelity Magellan and Fidelity Growth
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Magellan Fund and Fidelity Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Growth Income and Fidelity Magellan 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 Magellan Fund are associated (or correlated) with Fidelity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Growth Income has no effect on the direction of Fidelity Magellan i.e., Fidelity Magellan and Fidelity Growth go up and down completely randomly.
Pair Corralation between Fidelity Magellan and Fidelity Growth
Assuming the 90 days horizon Fidelity Magellan is expected to generate 1.24 times less return on investment than Fidelity Growth. In addition to that, Fidelity Magellan is 1.29 times more volatile than Fidelity Growth Income. It trades about 0.24 of its total potential returns per unit of risk. Fidelity Growth Income is currently generating about 0.38 per unit of volatility. If you would invest 6,247 in Fidelity Growth Income on September 3, 2024 and sell it today you would earn a total of 359.00 from holding Fidelity Growth Income or generate 5.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Magellan Fund vs. Fidelity Growth Income
Performance |
| Timeline |
| Fidelity Magellan |
| Fidelity Growth Income |
Fidelity Magellan and Fidelity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Magellan and Fidelity Growth
The main advantage of trading using opposite Fidelity Magellan and Fidelity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Magellan position performs unexpectedly, Fidelity 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 Fidelity Growth will offset losses from the drop in Fidelity Growth's long position.| Fidelity Magellan vs. Fidelity Growth Income | Fidelity Magellan vs. Fidelity Equity Income Fund | Fidelity Magellan vs. Fidelity Contrafund | Fidelity Magellan vs. Fidelity Growth Pany |
| Fidelity Growth vs. Vanguard Total Stock | Fidelity Growth vs. Vanguard 500 Index | Fidelity Growth vs. Vanguard Total Stock | Fidelity Growth vs. Vanguard Total Stock |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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