Correlation Between Fidelity Advisor and Small Cap
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Small Cap 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 Advisor and Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Diversified and Small Cap Growth, you can compare the effects of market volatilities on Fidelity Advisor and Small Cap 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 Advisor with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Small Cap.
Diversification Opportunities for Fidelity Advisor and Small Cap
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Small is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Diversified and Small Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Growth and Fidelity Advisor 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 Advisor Diversified are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Growth has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Small Cap go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Small Cap
Assuming the 90 days horizon Fidelity Advisor is expected to generate 13.7 times less return on investment than Small Cap. But when comparing it to its historical volatility, Fidelity Advisor Diversified is 1.74 times less risky than Small Cap. It trades about 0.04 of its potential returns per unit of risk. Small Cap Growth is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,256 in Small Cap Growth on September 1, 2024 and sell it today you would earn a total of 236.00 from holding Small Cap Growth or generate 10.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Advisor Diversified vs. Small Cap Growth
Performance |
| Timeline |
| Fidelity Advisor Div |
| Small Cap Growth |
Fidelity Advisor and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Small Cap
The main advantage of trading using opposite Fidelity Advisor and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Small Cap 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 Cap will offset losses from the drop in Small Cap's long position.| Fidelity Advisor vs. Fidelity International Growth | Fidelity Advisor vs. Foreign Smaller Panies | Fidelity Advisor vs. Hartford Small Cap | Fidelity Advisor vs. Fidelity Small Cap |
| Small Cap vs. Mid Cap Value | Small Cap vs. Equity Growth Fund | Small Cap vs. Income Growth Fund | Small Cap vs. Diversified Bond Fund |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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