Correlation Between Fidelity and Fidelity Extended
Can any of the company-specific risk be diversified away by investing in both Fidelity and Fidelity Extended 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 and Fidelity Extended into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Bond Index and Fidelity Extended Market, you can compare the effects of market volatilities on Fidelity and Fidelity Extended 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 with a short position of Fidelity Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity and Fidelity Extended.
Diversification Opportunities for Fidelity and Fidelity Extended
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fidelity and Fidelity is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Bond Index and Fidelity Extended Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Extended Market and Fidelity 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 Bond Index are associated (or correlated) with Fidelity Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Extended Market has no effect on the direction of Fidelity i.e., Fidelity and Fidelity Extended go up and down completely randomly.
Pair Corralation between Fidelity and Fidelity Extended
Assuming the 90 days horizon Fidelity Bond Index is expected to under-perform the Fidelity Extended. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Bond Index is 4.43 times less risky than Fidelity Extended. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Fidelity Extended Market is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 8,895 in Fidelity Extended Market on August 28, 2024 and sell it today you would earn a total of 852.00 from holding Fidelity Extended Market or generate 9.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Bond Index vs. Fidelity Extended Market
Performance |
| Timeline |
| Fidelity Bond Index |
| Fidelity Extended Market |
Fidelity and Fidelity Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity and Fidelity Extended
The main advantage of trading using opposite Fidelity and Fidelity Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity position performs unexpectedly, Fidelity Extended 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 Extended will offset losses from the drop in Fidelity Extended's long position.| Fidelity vs. Fidelity International Index | Fidelity vs. Fidelity Total International | Fidelity vs. Fidelity Total Market | Fidelity vs. Fidelity Extended Market |
| Fidelity Extended vs. Fidelity International Index | Fidelity Extended vs. Fidelity 500 Index | Fidelity Extended vs. Fidelity Bond Index | Fidelity Extended vs. Fidelity Total Market |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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