Correlation Between Fidelity Salem and Fidelity Value
Can any of the company-specific risk be diversified away by investing in both Fidelity Salem and Fidelity Value 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 Salem and Fidelity Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Salem Street and Fidelity Value Fund, you can compare the effects of market volatilities on Fidelity Salem and Fidelity Value 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 Salem with a short position of Fidelity Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Salem and Fidelity Value.
Diversification Opportunities for Fidelity Salem and Fidelity Value
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Fidelity is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Salem Street and Fidelity Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Value and Fidelity Salem 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 Salem Street are associated (or correlated) with Fidelity Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Value has no effect on the direction of Fidelity Salem i.e., Fidelity Salem and Fidelity Value go up and down completely randomly.
Pair Corralation between Fidelity Salem and Fidelity Value
Assuming the 90 days horizon Fidelity Salem Street is expected to generate 0.87 times more return on investment than Fidelity Value. However, Fidelity Salem Street is 1.14 times less risky than Fidelity Value. It trades about 0.34 of its potential returns per unit of risk. Fidelity Value Fund is currently generating about 0.01 per unit of risk. If you would invest 1,250 in Fidelity Salem Street on September 14, 2024 and sell it today you would earn a total of 55.00 from holding Fidelity Salem Street or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Salem Street vs. Fidelity Value Fund
Performance |
| Timeline |
| Fidelity Salem Street |
| Fidelity Value |
Fidelity Salem and Fidelity Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Salem and Fidelity Value
The main advantage of trading using opposite Fidelity Salem and Fidelity Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Salem position performs unexpectedly, Fidelity Value 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 Value will offset losses from the drop in Fidelity Value's long position.| Fidelity Salem vs. Fidelity Freedom 2015 | Fidelity Salem vs. Fidelity Puritan Fund | Fidelity Salem vs. Fidelity Puritan Fund | Fidelity Salem vs. Fidelity Pennsylvania Municipal |
| Fidelity Value vs. Fidelity Mid Cap Stock | Fidelity Value vs. Fidelity Low Priced Stock | Fidelity Value vs. Fidelity International Discovery | Fidelity Value vs. Fidelity Capital Appreciation |
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.
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