Correlation Between Fidelity Small and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Fidelity Series 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 Small and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Small Cap and Fidelity Series Large, you can compare the effects of market volatilities on Fidelity Small and Fidelity Series 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 Small with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Fidelity Series.
Diversification Opportunities for Fidelity Small and Fidelity Series
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Fidelity Series Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Large and Fidelity Small 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 Small Cap are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Large has no effect on the direction of Fidelity Small i.e., Fidelity Small and Fidelity Series go up and down completely randomly.
Pair Corralation between Fidelity Small and Fidelity Series
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.49 times more return on investment than Fidelity Series. However, Fidelity Small is 1.49 times more volatile than Fidelity Series Large. It trades about 0.26 of its potential returns per unit of risk. Fidelity Series Large is currently generating about 0.28 per unit of risk. If you would invest 2,525 in Fidelity Small Cap on September 1, 2024 and sell it today you would earn a total of 202.00 from holding Fidelity Small Cap or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Fidelity Series Large
Performance |
| Timeline |
| Fidelity Small Cap |
| Fidelity Series Large |
Fidelity Small and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Fidelity Series
The main advantage of trading using opposite Fidelity Small and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Fidelity Series 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 Series will offset losses from the drop in Fidelity Series' long position.| Fidelity Small vs. Fidelity Flex Mid | Fidelity Small vs. Fidelity Flex International | Fidelity Small vs. Fidelity Flex 500 | Fidelity Small vs. Fidelity Flex Bond |
| Fidelity Series vs. Columbia Global Technology | Fidelity Series vs. Fidelity Advisor Technology | Fidelity Series vs. Biotechnology Ultrasector Profund | Fidelity Series vs. Technology Ultrasector Profund |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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