Correlation Between Fidelity Flex and Fidelity Small
Can any of the company-specific risk be diversified away by investing in both Fidelity Flex and Fidelity Small 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 Flex and Fidelity Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Flex Freedom and Fidelity Small Cap, you can compare the effects of market volatilities on Fidelity Flex and Fidelity Small 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 Flex with a short position of Fidelity Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Flex and Fidelity Small.
Diversification Opportunities for Fidelity Flex and Fidelity Small
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Flex Freedom and Fidelity Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Small Cap and Fidelity Flex 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 Flex Freedom are associated (or correlated) with Fidelity Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Small Cap has no effect on the direction of Fidelity Flex i.e., Fidelity Flex and Fidelity Small go up and down completely randomly.
Pair Corralation between Fidelity Flex and Fidelity Small
Assuming the 90 days horizon Fidelity Flex Freedom is expected to generate 0.6 times more return on investment than Fidelity Small. However, Fidelity Flex Freedom is 1.67 times less risky than Fidelity Small. It trades about 0.09 of its potential returns per unit of risk. Fidelity Small Cap is currently generating about 0.03 per unit of risk. If you would invest 979.00 in Fidelity Flex Freedom on August 27, 2024 and sell it today you would earn a total of 378.00 from holding Fidelity Flex Freedom or generate 38.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Flex Freedom vs. Fidelity Small Cap
Performance |
| Timeline |
| Fidelity Flex Freedom |
| Fidelity Small Cap |
Fidelity Flex and Fidelity Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Flex and Fidelity Small
The main advantage of trading using opposite Fidelity Flex and Fidelity Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Flex position performs unexpectedly, Fidelity Small 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 Small will offset losses from the drop in Fidelity Small's long position.| Fidelity Flex vs. Fidelity Freedom Blend | Fidelity Flex vs. Fidelity Freedom Blend | Fidelity Flex vs. Fidelity Freedom Blend | Fidelity Flex vs. Fidelity Freedom Blend |
| Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Focused Stock | Fidelity Small vs. Fidelity Mid Cap | Fidelity Small vs. Fidelity Large Cap |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |