Correlation Between Great West and Fidelity Small
Can any of the company-specific risk be diversified away by investing in both Great West and Fidelity Small 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 Great West and Fidelity Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Loomis Sayles and Fidelity Small Cap, you can compare the effects of market volatilities on Great West and Fidelity Small 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 Great West with a short position of Fidelity Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Fidelity Small.
Diversification Opportunities for Great West and Fidelity Small
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Great and Fidelity is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Great West Loomis Sayles and Fidelity Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Small Cap and Great West 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 Great West Loomis Sayles are associated (or correlated) with Fidelity Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Small Cap has no effect on the direction of Great West i.e., Great West and Fidelity Small go up and down completely randomly.
Pair Corralation between Great West and Fidelity Small
Assuming the 90 days horizon Great West Loomis Sayles is expected to generate 0.91 times more return on investment than Fidelity Small. However, Great West Loomis Sayles is 1.1 times less risky than Fidelity Small. It trades about -0.39 of its potential returns per unit of risk. Fidelity Small Cap is currently generating about -0.35 per unit of risk. If you would invest 4,178 in Great West Loomis Sayles on September 28, 2024 and sell it today you would lose (337.00) from holding Great West Loomis Sayles or give up 8.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Great West Loomis Sayles vs. Fidelity Small Cap
Performance |
| Timeline |
| Great West Loomis |
| Fidelity Small Cap |
Great West and Fidelity Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Fidelity Small
The main advantage of trading using opposite Great West and Fidelity Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Fidelity Small 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 Small will offset losses from the drop in Fidelity Small's long position.| Great West vs. Great West Securefoundation Balanced | Great West vs. Great West Lifetime 2020 | Great West vs. Great West Lifetime 2020 | Great West vs. Great West Lifetime 2020 |
| Fidelity Small vs. Fidelity Freedom 2015 | Fidelity Small vs. Fidelity Puritan Fund | Fidelity Small vs. Fidelity Puritan Fund | Fidelity Small vs. Fidelity Pennsylvania Municipal |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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