Correlation Between Fidelity Blue and Growth Fund

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

By analyzing existing cross correlation between Fidelity Blue Chip and Growth Fund Investor, you can compare the effects of market volatilities on Fidelity Blue and Growth Fund 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 Fidelity Blue with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Blue and Growth Fund.

Diversification Opportunities for Fidelity Blue and Growth Fund

0.99

Correlation Coefficient

Fidelity Blue  Growth Fund

No risk reduction

The 3 months correlation between Fidelity and Growth is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Blue Chip and Growth Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund Investor and Fidelity Blue 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 Fidelity Blue Chip are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund Investor has no effect on the direction of Fidelity Blue i.e., Fidelity Blue and Growth Fund go up and down completely randomly.

Pair Corralation between Fidelity Blue and Growth Fund

Assuming the 90 days horizon Fidelity Blue Chip is expected to generate 1.09 times more return on investment than Growth Fund. However, Fidelity Blue is 1.09 times more volatile than Growth Fund Investor. It trades about 0.23 of its potential returns per unit of risk. Growth Fund Investor is currently generating about 0.17 per unit of risk. If you would invest  22,513  in Fidelity Blue Chip on September 12, 2024 and sell it today you would earn a total of  973.00  from holding Fidelity Blue Chip or generate 4.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Fidelity Blue Chip  vs.  Growth Fund Investor

Fidelity Blue Chip

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Blue Chip are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Blue showed solid returns over the last few months and may actually be approaching a breakup point.

Growth Fund Investor

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Growth Fund Investor are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Growth Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fidelity Blue and Growth Fund

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

The idea behind Fidelity Blue Chip and Growth Fund Investor 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.