Correlation Between Smallcap Growth and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Smallcap Growth and Fidelity Advisor 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 Smallcap Growth and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Growth Fund and Fidelity Advisor Energy, you can compare the effects of market volatilities on Smallcap Growth and Fidelity Advisor 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 Smallcap Growth with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Fidelity Advisor.
Diversification Opportunities for Smallcap Growth and Fidelity Advisor
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Smallcap and Fidelity is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth Fund and Fidelity Advisor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Energy and Smallcap Growth 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 Smallcap Growth Fund are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Energy has no effect on the direction of Smallcap Growth i.e., Smallcap Growth and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Smallcap Growth and Fidelity Advisor
Assuming the 90 days horizon Smallcap Growth Fund is expected to generate 0.85 times more return on investment than Fidelity Advisor. However, Smallcap Growth Fund is 1.17 times less risky than Fidelity Advisor. It trades about 0.06 of its potential returns per unit of risk. Fidelity Advisor Energy is currently generating about 0.02 per unit of risk. If you would invest 1,195 in Smallcap Growth Fund on September 14, 2024 and sell it today you would earn a total of 491.00 from holding Smallcap Growth Fund or generate 41.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap Growth Fund vs. Fidelity Advisor Energy
Performance |
| Timeline |
| Smallcap Growth |
| Fidelity Advisor Energy |
Smallcap Growth and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Growth and Fidelity Advisor
The main advantage of trading using opposite Smallcap Growth and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Growth position performs unexpectedly, Fidelity Advisor 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 Advisor will offset losses from the drop in Fidelity Advisor's long position.| Smallcap Growth vs. Eip Growth And | Smallcap Growth vs. Franklin Growth Opportunities | Smallcap Growth vs. Rational Defensive Growth | Smallcap Growth vs. Praxis Growth Index |
| Fidelity Advisor vs. L Abbett Growth | Fidelity Advisor vs. Praxis Growth Index | Fidelity Advisor vs. Pace Smallmedium Growth | Fidelity Advisor vs. Smallcap Growth 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |