Correlation Between Fidelity Small and Aristotle Funds
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Aristotle Funds 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 Aristotle Funds 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 Aristotle Funds Series, you can compare the effects of market volatilities on Fidelity Small and Aristotle Funds 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 Aristotle Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Aristotle Funds.
Diversification Opportunities for Fidelity Small and Aristotle Funds
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Aristotle is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series 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 Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of Fidelity Small i.e., Fidelity Small and Aristotle Funds go up and down completely randomly.
Pair Corralation between Fidelity Small and Aristotle Funds
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.19 times more return on investment than Aristotle Funds. However, Fidelity Small is 1.19 times more volatile than Aristotle Funds Series. It trades about 0.05 of its potential returns per unit of risk. Aristotle Funds Series is currently generating about 0.05 per unit of risk. If you would invest 2,408 in Fidelity Small Cap on August 26, 2024 and sell it today you would earn a total of 546.00 from holding Fidelity Small Cap or generate 22.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Aristotle Funds Series
Performance |
| Timeline |
| Fidelity Small Cap |
| Aristotle Funds Series |
Fidelity Small and Aristotle Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Aristotle Funds
The main advantage of trading using opposite Fidelity Small and Aristotle Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Aristotle Funds 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 Aristotle Funds will offset losses from the drop in Aristotle Funds' long position.| Fidelity Small vs. Fidelity Mid Cap | Fidelity Small vs. Fidelity International Index | Fidelity Small vs. Fidelity Bond Index | Fidelity Small vs. Fidelity Large Cap |
| Aristotle Funds vs. Goldman Sachs Financial | Aristotle Funds vs. Blackrock Financial Institutions | Aristotle Funds vs. Vanguard Financials Index | Aristotle Funds vs. Angel Oak Financial |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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