Correlation Between Touchstone Small and Fidelity Flex
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Fidelity Flex 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 Flex 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 Flex Freedom, you can compare the effects of market volatilities on Touchstone Small and Fidelity Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Fidelity Flex.
Diversification Opportunities for Touchstone Small and Fidelity Flex
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Touchstone and Fidelity is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Fidelity Flex Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Freedom 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Flex Freedom has no effect on the direction of Touchstone Small i.e., Touchstone Small and Fidelity Flex go up and down completely randomly.
Pair Corralation between Touchstone Small and Fidelity Flex
Assuming the 90 days horizon Touchstone Small Cap is expected to under-perform the Fidelity Flex. In addition to that, Touchstone Small is 1.79 times more volatile than Fidelity Flex Freedom. It trades about -0.07 of its total potential returns per unit of risk. Fidelity Flex Freedom is currently generating about 0.11 per unit of volatility. If you would invest 1,279 in Fidelity Flex Freedom on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Fidelity Flex Freedom or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Fidelity Flex Freedom
Performance |
| Timeline |
| Touchstone Small Cap |
| Fidelity Flex Freedom |
Touchstone Small and Fidelity Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Fidelity Flex
The main advantage of trading using opposite Touchstone Small and Fidelity Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Fidelity Flex 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 Flex will offset losses from the drop in Fidelity Flex's long position.| Touchstone Small vs. Goldman Sachs Clean | Touchstone Small vs. Franklin Gold Precious | Touchstone Small vs. Invesco Gold Special | Touchstone Small vs. Gold And Precious |
| Fidelity Flex vs. Ep Emerging Markets | Fidelity Flex vs. Transamerica Emerging Markets | Fidelity Flex vs. Artisan Emerging Markets | Fidelity Flex vs. Kinetics Market Opportunities |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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