Correlation Between Fidelity Extended and Fidelity Total
Can any of the company-specific risk be diversified away by investing in both Fidelity Extended and Fidelity Total 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 Total 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 Total Market, you can compare the effects of market volatilities on Fidelity Extended and Fidelity Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Extended and Fidelity Total.
Diversification Opportunities for Fidelity Extended and Fidelity Total
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Extended Market and Fidelity Total Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Total Market 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 Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Total Market has no effect on the direction of Fidelity Extended i.e., Fidelity Extended and Fidelity Total go up and down completely randomly.
Pair Corralation between Fidelity Extended and Fidelity Total
Assuming the 90 days horizon Fidelity Extended Market is expected to generate 1.53 times more return on investment than Fidelity Total. However, Fidelity Extended is 1.53 times more volatile than Fidelity Total Market. It trades about 0.19 of its potential returns per unit of risk. Fidelity Total Market is currently generating about 0.14 per unit of risk. If you would invest 8,701 in Fidelity Extended Market on August 25, 2024 and sell it today you would earn a total of 883.00 from holding Fidelity Extended Market or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Extended Market vs. Fidelity Total Market
Performance |
| Timeline |
| Fidelity Extended Market |
| Fidelity Total Market |
Fidelity Extended and Fidelity Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Extended and Fidelity Total
The main advantage of trading using opposite Fidelity Extended and Fidelity Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Extended position performs unexpectedly, Fidelity Total 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 Total will offset losses from the drop in Fidelity Total'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 Total vs. Fidelity Zero Total | Fidelity Total vs. Fidelity 500 Index | Fidelity Total vs. Fidelity International Index | Fidelity Total vs. Fidelity Bond Index |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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