Correlation Between Fidelity Dividend and Fidelity Value

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

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

Diversification Opportunities for Fidelity Dividend and Fidelity Value

0.77

Correlation Coefficient

Fidelity Dividend  Fidelity Value

Poor diversification

The 3 months correlation between Fidelity and Fidelity is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Dividend Growth and Fidelity Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Value and Fidelity Dividend 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 Dividend Growth are associated (or correlated) with Fidelity Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Value has no effect on the direction of Fidelity Dividend i.e., Fidelity Dividend and Fidelity Value go up and down completely randomly.

Pair Corralation between Fidelity Dividend and Fidelity Value

Assuming the 90 days horizon Fidelity Dividend Growth is expected to generate 0.87 times more return on investment than Fidelity Value. However, Fidelity Dividend Growth is 1.14 times less risky than Fidelity Value. It trades about 0.15 of its potential returns per unit of risk. Fidelity Value Fund is currently generating about 0.11 per unit of risk. If you would invest  3,763  in Fidelity Dividend Growth on September 14, 2024 and sell it today you would earn a total of  275.00  from holding Fidelity Dividend Growth or generate 7.31% return on investment over 90 days.

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

Fidelity Dividend Growth  vs.  Fidelity Value Fund

Fidelity Dividend Growth

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Dividend Growth are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Fidelity Dividend may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity Value

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Value Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Fidelity Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Dividend and Fidelity Value

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

The idea behind Fidelity Dividend Growth and Fidelity Value Fund 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.