Correlation Between Fidelity Extended and Fidelity Nasdaq
Can any of the company-specific risk be diversified away by investing in both Fidelity Extended and Fidelity Nasdaq 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 Fidelity Nasdaq 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 Fidelity Nasdaq Posite, you can compare the effects of market volatilities on Fidelity Extended and Fidelity Nasdaq 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 Fidelity Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Extended and Fidelity Nasdaq.
Diversification Opportunities for Fidelity Extended and Fidelity Nasdaq
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Extended Market and Fidelity Nasdaq Posite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Nasdaq Posite 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 Fidelity Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Nasdaq Posite has no effect on the direction of Fidelity Extended i.e., Fidelity Extended and Fidelity Nasdaq go up and down completely randomly.
Pair Corralation between Fidelity Extended and Fidelity Nasdaq
Assuming the 90 days horizon Fidelity Extended is expected to generate 1.55 times less return on investment than Fidelity Nasdaq. In addition to that, Fidelity Extended is 1.04 times more volatile than Fidelity Nasdaq Posite. It trades about 0.06 of its total potential returns per unit of risk. Fidelity Nasdaq Posite is currently generating about 0.1 per unit of volatility. If you would invest 14,898 in Fidelity Nasdaq Posite on November 5, 2024 and sell it today you would earn a total of 9,986 from holding Fidelity Nasdaq Posite or generate 67.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Extended Market vs. Fidelity Nasdaq Posite
Performance |
| Timeline |
| Fidelity Extended Market |
| Fidelity Nasdaq Posite |
Fidelity Extended and Fidelity Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Extended and Fidelity Nasdaq
The main advantage of trading using opposite Fidelity Extended and Fidelity Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Extended position performs unexpectedly, Fidelity Nasdaq 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 Nasdaq will offset losses from the drop in Fidelity Nasdaq'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 |
| Fidelity Nasdaq vs. Fidelity 500 Index | Fidelity Nasdaq vs. Fidelity Total Market | Fidelity Nasdaq vs. Retailing Portfolio Retailing | Fidelity Nasdaq vs. Software And It |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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