Correlation Between Aggressive Growth and Fidelity Small
Can any of the company-specific risk be diversified away by investing in both Aggressive Growth 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 Aggressive Growth and Fidelity Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aggressive Growth Allocation and Fidelity Small Cap, you can compare the effects of market volatilities on Aggressive Growth 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 Aggressive Growth with a short position of Fidelity Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aggressive Growth and Fidelity Small.
Diversification Opportunities for Aggressive Growth and Fidelity Small
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aggressive and Fidelity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Allocation 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 Aggressive Growth 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 Aggressive Growth Allocation 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 Aggressive Growth i.e., Aggressive Growth and Fidelity Small go up and down completely randomly.
Pair Corralation between Aggressive Growth and Fidelity Small
Assuming the 90 days horizon Aggressive Growth is expected to generate 4.2 times less return on investment than Fidelity Small. But when comparing it to its historical volatility, Aggressive Growth Allocation is 2.34 times less risky than Fidelity Small. It trades about 0.13 of its potential returns per unit of risk. Fidelity Small Cap is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,530 in Fidelity Small Cap on August 30, 2024 and sell it today you would earn a total of 189.00 from holding Fidelity Small Cap or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aggressive Growth Allocation vs. Fidelity Small Cap
Performance |
| Timeline |
| Aggressive Growth |
| Fidelity Small Cap |
Aggressive Growth and Fidelity Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aggressive Growth and Fidelity Small
The main advantage of trading using opposite Aggressive Growth and Fidelity Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aggressive Growth 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.| Aggressive Growth vs. Mesirow Financial Small | Aggressive Growth vs. Prudential Jennison Financial | Aggressive Growth vs. Hennessy Large Cap | Aggressive Growth vs. Financials Ultrasector Profund |
| Fidelity Small vs. Putnam Equity Income | Fidelity Small vs. Putnam Growth Opportunities | Fidelity Small vs. HUMANA INC | Fidelity Small vs. Aquagold International |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |