Correlation Between Touchstone Small and Fidelity Dividend
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Fidelity Dividend 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 Touchstone Small and Fidelity Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Small Cap and Fidelity Dividend Growth, you can compare the effects of market volatilities on Touchstone Small and Fidelity Dividend 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 Touchstone Small with a short position of Fidelity Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Fidelity Dividend.
Diversification Opportunities for Touchstone Small and Fidelity Dividend
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Touchstone and Fidelity is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Fidelity Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Dividend Growth and Touchstone 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 Touchstone Small Cap are associated (or correlated) with Fidelity Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Dividend Growth has no effect on the direction of Touchstone Small i.e., Touchstone Small and Fidelity Dividend go up and down completely randomly.
Pair Corralation between Touchstone Small and Fidelity Dividend
Assuming the 90 days horizon Touchstone Small Cap is expected to under-perform the Fidelity Dividend. In addition to that, Touchstone Small is 1.07 times more volatile than Fidelity Dividend Growth. It trades about -0.03 of its total potential returns per unit of risk. Fidelity Dividend Growth is currently generating about 0.08 per unit of volatility. If you would invest 3,987 in Fidelity Dividend Growth on September 13, 2024 and sell it today you would earn a total of 44.00 from holding Fidelity Dividend Growth or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Fidelity Dividend Growth
Performance |
| Timeline |
| Touchstone Small Cap |
| Fidelity Dividend Growth |
Touchstone Small and Fidelity Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Fidelity Dividend
The main advantage of trading using opposite Touchstone Small and Fidelity Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Fidelity Dividend 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 Dividend will offset losses from the drop in Fidelity Dividend's long position.| Touchstone Small vs. Jhancock Real Estate | Touchstone Small vs. Real Estate Ultrasector | Touchstone Small vs. Short Real Estate | Touchstone Small vs. Pender Real Estate |
| Fidelity Dividend vs. Small Pany Growth | Fidelity Dividend vs. Touchstone Small Cap | Fidelity Dividend vs. Sp Smallcap 600 | Fidelity Dividend vs. Guidemark Smallmid Cap |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |