Correlation Between Ab Small and Fidelity Growth
Can any of the company-specific risk be diversified away by investing in both Ab Small and Fidelity Growth 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 Ab Small and Fidelity Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Fidelity Growth Strategies, you can compare the effects of market volatilities on Ab Small and Fidelity Growth 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 Ab Small with a short position of Fidelity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Fidelity Growth.
Diversification Opportunities for Ab Small and Fidelity Growth
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QUAKX and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Fidelity Growth Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Growth Stra and Ab 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 Ab Small Cap are associated (or correlated) with Fidelity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Growth Stra has no effect on the direction of Ab Small i.e., Ab Small and Fidelity Growth go up and down completely randomly.
Pair Corralation between Ab Small and Fidelity Growth
Assuming the 90 days horizon Ab Small is expected to generate 1.36 times less return on investment than Fidelity Growth. In addition to that, Ab Small is 1.29 times more volatile than Fidelity Growth Strategies. It trades about 0.07 of its total potential returns per unit of risk. Fidelity Growth Strategies is currently generating about 0.12 per unit of volatility. If you would invest 5,151 in Fidelity Growth Strategies on August 31, 2024 and sell it today you would earn a total of 2,691 from holding Fidelity Growth Strategies or generate 52.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Ab Small Cap vs. Fidelity Growth Strategies
Performance |
| Timeline |
| Ab Small Cap |
| Fidelity Growth Stra |
Ab Small and Fidelity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Fidelity Growth
The main advantage of trading using opposite Ab Small and Fidelity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Fidelity Growth 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 Growth will offset losses from the drop in Fidelity Growth's long position.| Ab Small vs. The Hartford Midcap | Ab Small vs. Mfs Emerging Markets | Ab Small vs. Wells Fargo Special | Ab Small vs. Baron Emerging Markets |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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