Correlation Between Fidelity Small and Small Company
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Small Company 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 Small Company 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 Small Pany Fund, you can compare the effects of market volatilities on Fidelity Small and Small Company 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 Small Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Small Company.
Diversification Opportunities for Fidelity Small and Small Company
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and SMALL is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Small Pany Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Pany Fund 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 Small Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Pany Fund has no effect on the direction of Fidelity Small i.e., Fidelity Small and Small Company go up and down completely randomly.
Pair Corralation between Fidelity Small and Small Company
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.18 times more return on investment than Small Company. However, Fidelity Small is 1.18 times more volatile than Small Pany Fund. It trades about -0.22 of its potential returns per unit of risk. Small Pany Fund is currently generating about -0.32 per unit of risk. If you would invest 2,836 in Fidelity Small Cap on November 27, 2024 and sell it today you would lose (129.00) from holding Fidelity Small Cap or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Small Pany Fund
Performance |
| Timeline |
| Fidelity Small Cap |
| Small Pany Fund |
Fidelity Small and Small Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Small Company
The main advantage of trading using opposite Fidelity Small and Small Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Small Company 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 Small Company will offset losses from the drop in Small Company'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 |
| Small Company vs. Parnassus Equity Incme | Small Company vs. Wcm Focused International | Small Company vs. Tiaa Cref Growth Income | Small Company vs. T Rowe Price |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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