Correlation Between Fidelity Short and Lkcm Small
Can any of the company-specific risk be diversified away by investing in both Fidelity Short and Lkcm 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 Short and Lkcm Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Short Duration and Lkcm Small Cap, you can compare the effects of market volatilities on Fidelity Short and Lkcm 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 Short with a short position of Lkcm Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Short and Lkcm Small.
Diversification Opportunities for Fidelity Short and Lkcm Small
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Lkcm is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Short Duration and Lkcm Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Small Cap and Fidelity Short 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 Short Duration are associated (or correlated) with Lkcm Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Small Cap has no effect on the direction of Fidelity Short i.e., Fidelity Short and Lkcm Small go up and down completely randomly.
Pair Corralation between Fidelity Short and Lkcm Small
Assuming the 90 days horizon Fidelity Short is expected to generate 12.06 times less return on investment than Lkcm Small. But when comparing it to its historical volatility, Fidelity Short Duration is 13.85 times less risky than Lkcm Small. It trades about 0.36 of its potential returns per unit of risk. Lkcm Small Cap is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,148 in Lkcm Small Cap on August 30, 2024 and sell it today you would earn a total of 236.00 from holding Lkcm Small Cap or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Short Duration vs. Lkcm Small Cap
Performance |
| Timeline |
| Fidelity Short Duration |
| Lkcm Small Cap |
Fidelity Short and Lkcm Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Short and Lkcm Small
The main advantage of trading using opposite Fidelity Short and Lkcm Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Short position performs unexpectedly, Lkcm 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 Lkcm Small will offset losses from the drop in Lkcm Small's long position.| Fidelity Short vs. Fidelity Advisor Limited | Fidelity Short vs. Fidelity Global Bond | Fidelity Short vs. Fidelity Focused High | Fidelity Short vs. Fidelity Global Equity |
| Lkcm Small vs. Putnam Equity Income | Lkcm Small vs. Putnam Growth Opportunities | Lkcm Small vs. HUMANA INC | Lkcm 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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