Correlation Between Small Cap and Fidelity Salem
Can any of the company-specific risk be diversified away by investing in both Small Cap and Fidelity Salem 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 Small Cap and Fidelity Salem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Stock and Fidelity Salem Street, you can compare the effects of market volatilities on Small Cap and Fidelity Salem 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 Small Cap with a short position of Fidelity Salem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Fidelity Salem.
Diversification Opportunities for Small Cap and Fidelity Salem
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Small and Fidelity is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock and Fidelity Salem Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Salem Street and Small Cap 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 Small Cap Stock are associated (or correlated) with Fidelity Salem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Salem Street has no effect on the direction of Small Cap i.e., Small Cap and Fidelity Salem go up and down completely randomly.
Pair Corralation between Small Cap and Fidelity Salem
Assuming the 90 days horizon Small Cap Stock is expected to under-perform the Fidelity Salem. In addition to that, Small Cap is 1.78 times more volatile than Fidelity Salem Street. It trades about -0.01 of its total potential returns per unit of risk. Fidelity Salem Street is currently generating about 0.12 per unit of volatility. If you would invest 1,368 in Fidelity Salem Street on September 13, 2024 and sell it today you would earn a total of 18.00 from holding Fidelity Salem Street or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Small Cap Stock vs. Fidelity Salem Street
Performance |
| Timeline |
| Small Cap Stock |
| Fidelity Salem Street |
Small Cap and Fidelity Salem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Fidelity Salem
The main advantage of trading using opposite Small Cap and Fidelity Salem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Fidelity Salem 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 Salem will offset losses from the drop in Fidelity Salem's long position.| Small Cap vs. Guggenheim Managed Futures | Small Cap vs. Simt Multi Asset Inflation | Small Cap vs. Goldman Sachs Inflation | Small Cap vs. Loomis Sayles Inflation |
| Fidelity Salem vs. Fidelity Freedom 2015 | Fidelity Salem vs. Fidelity Puritan Fund | Fidelity Salem vs. Fidelity Puritan Fund | Fidelity Salem 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 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.
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