Correlation Between Fidelity Mega and Fidelity Small
Can any of the company-specific risk be diversified away by investing in both Fidelity Mega 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 Fidelity Mega and Fidelity Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Mega Cap and Fidelity Small Cap, you can compare the effects of market volatilities on Fidelity Mega 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 Fidelity Mega with a short position of Fidelity Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Mega and Fidelity Small.
Diversification Opportunities for Fidelity Mega and Fidelity Small
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Mega Cap and Fidelity Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Small Cap and Fidelity Mega 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 Mega Cap 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 Cap has no effect on the direction of Fidelity Mega i.e., Fidelity Mega and Fidelity Small go up and down completely randomly.
Pair Corralation between Fidelity Mega and Fidelity Small
If you would invest 2,627 in Fidelity Mega Cap on September 20, 2024 and sell it today you would earn a total of 11.00 from holding Fidelity Mega Cap or generate 0.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 4.76% |
Values | Daily Returns |
Fidelity Mega Cap vs. Fidelity Small Cap
Performance |
Timeline |
Fidelity Mega Cap |
Fidelity Small Cap |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fidelity Mega and Fidelity Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity Mega and Fidelity Small
The main advantage of trading using opposite Fidelity Mega and Fidelity Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Mega 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.Fidelity Mega vs. Fidelity Large Cap | Fidelity Mega vs. Fidelity Focused Stock | Fidelity Mega vs. Fidelity Stock Selector | Fidelity Mega vs. Fidelity Trend Fund |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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