Correlation Between Fidelity Small and Dreyfus Opportunistic
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Dreyfus Opportunistic 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 Dreyfus Opportunistic 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 Dreyfus Opportunistic Small, you can compare the effects of market volatilities on Fidelity Small and Dreyfus Opportunistic 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 Dreyfus Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Dreyfus Opportunistic.
Diversification Opportunities for Fidelity Small and Dreyfus Opportunistic
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Dreyfus is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Dreyfus Opportunistic Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Opportunistic 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 Dreyfus Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Opportunistic has no effect on the direction of Fidelity Small i.e., Fidelity Small and Dreyfus Opportunistic go up and down completely randomly.
Pair Corralation between Fidelity Small and Dreyfus Opportunistic
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.12 times more return on investment than Dreyfus Opportunistic. However, Fidelity Small is 1.12 times more volatile than Dreyfus Opportunistic Small. It trades about 0.21 of its potential returns per unit of risk. Dreyfus Opportunistic Small is currently generating about 0.19 per unit of risk. If you would invest 2,800 in Fidelity Small Cap on August 28, 2024 and sell it today you would earn a total of 208.00 from holding Fidelity Small Cap or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Small Cap vs. Dreyfus Opportunistic Small
Performance |
| Timeline |
| Fidelity Small Cap |
| Dreyfus Opportunistic |
Fidelity Small and Dreyfus Opportunistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Dreyfus Opportunistic
The main advantage of trading using opposite Fidelity Small and Dreyfus Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Dreyfus Opportunistic 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 Dreyfus Opportunistic will offset losses from the drop in Dreyfus Opportunistic's 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 |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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