Correlation Between Fidelity Small and Fidelity Global
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and Fidelity Global 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 Global 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 Global Ex, you can compare the effects of market volatilities on Fidelity Small and Fidelity Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Fidelity Global.
Diversification Opportunities for Fidelity Small and Fidelity Global
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Fidelity is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Fidelity Global Ex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Ex 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Ex has no effect on the direction of Fidelity Small i.e., Fidelity Small and Fidelity Global go up and down completely randomly.
Pair Corralation between Fidelity Small and Fidelity Global
Assuming the 90 days horizon Fidelity Small Cap is expected to under-perform the Fidelity Global. In addition to that, Fidelity Small is 1.69 times more volatile than Fidelity Global Ex. It trades about -0.09 of its total potential returns per unit of risk. Fidelity Global Ex is currently generating about -0.01 per unit of volatility. If you would invest 1,536 in Fidelity Global Ex on September 12, 2024 and sell it today you would lose (2.00) from holding Fidelity Global Ex or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Fidelity Global Ex
Performance |
| Timeline |
| Fidelity Small Cap |
| Fidelity Global Ex |
Fidelity Small and Fidelity Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Fidelity Global
The main advantage of trading using opposite Fidelity Small and Fidelity Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, Fidelity Global 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 Global will offset losses from the drop in Fidelity Global'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 Global vs. Fidelity Bond Index | Fidelity Global vs. Fidelity Emerging Markets | Fidelity Global vs. Fidelity Small Cap | Fidelity Global vs. Fidelity Mid 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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