Correlation Between Fidelity Advisor and Fidelity Small
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor 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 Advisor 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 Advisor Value and Fidelity Small Cap, you can compare the effects of market volatilities on Fidelity Advisor 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 Advisor with a short position of Fidelity Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Fidelity Small.
Diversification Opportunities for Fidelity Advisor and Fidelity Small
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Value 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 Advisor 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 Advisor Value 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 Advisor i.e., Fidelity Advisor and Fidelity Small go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Fidelity Small
Assuming the 90 days horizon Fidelity Advisor Value is expected to generate 0.89 times more return on investment than Fidelity Small. However, Fidelity Advisor Value is 1.12 times less risky than Fidelity Small. It trades about 0.06 of its potential returns per unit of risk. Fidelity Small Cap is currently generating about 0.02 per unit of risk. If you would invest 4,698 in Fidelity Advisor Value on August 24, 2024 and sell it today you would earn a total of 1,608 from holding Fidelity Advisor Value or generate 34.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Value vs. Fidelity Small Cap
Performance |
| Timeline |
| Fidelity Advisor Value |
| Fidelity Small Cap |
Fidelity Advisor and Fidelity Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Fidelity Small
The main advantage of trading using opposite Fidelity Advisor and Fidelity Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor 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 Advisor vs. Fidelity Small Cap | Fidelity Advisor vs. Fidelity Mega Cap | Fidelity Advisor vs. Fidelity Value Discovery | Fidelity Advisor vs. Fidelity Mid Cap |
| Fidelity Small vs. Vanguard Explorer Value | Fidelity Small vs. Vanguard Strategic Equity | Fidelity Small vs. Vanguard Diversified Equity | Fidelity Small vs. Vanguard Mid 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |