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
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aggressive and Fidelity is 0.81. 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 Allocation is expected to generate 0.75 times more return on investment than Fidelity Small. However, Aggressive Growth Allocation is 1.34 times less risky than Fidelity Small. It trades about -0.22 of its potential returns per unit of risk. Fidelity Small Cap is currently generating about -0.27 per unit of risk. If you would invest 1,174 in Aggressive Growth Allocation on October 11, 2024 and sell it today you would lose (49.00) from holding Aggressive Growth Allocation or give up 4.17% of portfolio value 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. Baron Real Estate | Aggressive Growth vs. Columbia Real Estate | Aggressive Growth vs. Rems Real Estate | Aggressive Growth vs. Vy Clarion Real |
| Fidelity Small vs. Fidelity Mid Cap Stock | Fidelity Small vs. Fidelity Capital Appreciation | Fidelity Small vs. Fidelity Value Fund | Fidelity Small vs. Fidelity Stock Selector |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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