Correlation Between Fidelity Small and Fidelity Emerging
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Fidelity Emerging 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 Fidelity Emerging 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 Fidelity Emerging Markets, you can compare the effects of market volatilities on Fidelity Small and Fidelity Emerging 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 Fidelity Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Fidelity Emerging.
Diversification Opportunities for Fidelity Small and Fidelity Emerging
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and Fidelity is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Fidelity Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Emerging Markets 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 Fidelity Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Emerging Markets has no effect on the direction of Fidelity Small i.e., Fidelity Small and Fidelity Emerging go up and down completely randomly.
Pair Corralation between Fidelity Small and Fidelity Emerging
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.46 times more return on investment than Fidelity Emerging. However, Fidelity Small is 1.46 times more volatile than Fidelity Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. Fidelity Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest 2,228 in Fidelity Small Cap on August 26, 2024 and sell it today you would earn a total of 726.00 from holding Fidelity Small Cap or generate 32.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Fidelity Emerging Markets
Performance |
| Timeline |
| Fidelity Small Cap |
| Fidelity Emerging Markets |
Fidelity Small and Fidelity Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Fidelity Emerging
The main advantage of trading using opposite Fidelity Small and Fidelity Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Fidelity Emerging 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 Emerging will offset losses from the drop in Fidelity Emerging'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 |
| Fidelity Emerging vs. Fidelity International Index | Fidelity Emerging vs. Fidelity Real Estate | Fidelity Emerging vs. Fidelity Intermediate Treasury | Fidelity Emerging vs. Fidelity Inflation Protected Bond |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |