Correlation Between Fidelity Extended and Cambiar Smid
Can any of the company-specific risk be diversified away by investing in both Fidelity Extended and Cambiar Smid 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 Extended and Cambiar Smid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Extended Market and Cambiar Smid Fund, you can compare the effects of market volatilities on Fidelity Extended and Cambiar Smid 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 Extended with a short position of Cambiar Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Extended and Cambiar Smid.
Diversification Opportunities for Fidelity Extended and Cambiar Smid
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Cambiar is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Extended Market and Cambiar Smid Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Smid and Fidelity Extended 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 Extended Market are associated (or correlated) with Cambiar Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Smid has no effect on the direction of Fidelity Extended i.e., Fidelity Extended and Cambiar Smid go up and down completely randomly.
Pair Corralation between Fidelity Extended and Cambiar Smid
Assuming the 90 days horizon Fidelity Extended Market is expected to generate 1.36 times more return on investment than Cambiar Smid. However, Fidelity Extended is 1.36 times more volatile than Cambiar Smid Fund. It trades about 0.41 of its potential returns per unit of risk. Cambiar Smid Fund is currently generating about 0.24 per unit of risk. If you would invest 8,772 in Fidelity Extended Market on September 1, 2024 and sell it today you would earn a total of 1,050 from holding Fidelity Extended Market or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Extended Market vs. Cambiar Smid Fund
Performance |
| Timeline |
| Fidelity Extended Market |
| Cambiar Smid |
Fidelity Extended and Cambiar Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Extended and Cambiar Smid
The main advantage of trading using opposite Fidelity Extended and Cambiar Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Extended position performs unexpectedly, Cambiar Smid 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 Cambiar Smid will offset losses from the drop in Cambiar Smid's long position.| Fidelity Extended vs. Fidelity International Index | Fidelity Extended vs. Fidelity 500 Index | Fidelity Extended vs. Fidelity Bond Index | Fidelity Extended vs. Fidelity Total Market |
| Cambiar Smid vs. Cambiar International Equity | Cambiar Smid vs. Cambiar Small Cap | Cambiar Smid vs. Cambiar Opportunity Fund | Cambiar Smid vs. Cambiar Small 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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