Correlation Between ANT and Fidelity Small

Can any of the company-specific risk be diversified away by investing in both ANT and Fidelity Small 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 ANT and Fidelity Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANT and Fidelity Small Mid Factor, you can compare the effects of market volatilities on ANT and Fidelity Small 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 ANT with a short position of Fidelity Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Fidelity Small.

Diversification Opportunities for ANT and Fidelity Small

0.22

Correlation Coefficient

ANT  Fidelity Small

Modest diversification

The 3 months correlation between ANT and Fidelity is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Fidelity Small Mid Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Small Mid and ANT 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 ANT are associated (or correlated) with Fidelity Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Small Mid has no effect on the direction of ANT i.e., ANT and Fidelity Small go up and down completely randomly.

Pair Corralation between ANT and Fidelity Small

Assuming the 90 days trading horizon ANT is expected to generate 14.39 times more return on investment than Fidelity Small. However, ANT is 14.39 times more volatile than Fidelity Small Mid Factor. It trades about 0.06 of its potential returns per unit of risk. Fidelity Small Mid Factor is currently generating about -0.07 per unit of risk. If you would invest  147.00  in ANT on December 20, 2024 and sell it today you would earn a total of  0.00  from holding ANT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

ANT  vs.  Fidelity Small Mid Factor

ANT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Small Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Small Mid Factor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Fidelity Small is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ANT and Fidelity Small

The main advantage of trading using opposite ANT and Fidelity Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, Fidelity Small 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 Small will offset losses from the drop in Fidelity Small's long position.

The idea behind ANT and Fidelity Small Mid Factor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.