Correlation Between Fidelity New and Ancora/thelen Small-mid

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

By analyzing existing cross correlation between Fidelity New Markets and Ancorathelen Small Mid Cap, you can compare the effects of market volatilities on Fidelity New and Ancora/thelen Small-mid 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 New with a short position of Ancora/thelen Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Ancora/thelen Small-mid.

Diversification Opportunities for Fidelity New and Ancora/thelen Small-mid

0.58

Correlation Coefficient

Fidelity New  Ancora/thelen Small-mid

Very weak diversification

The 3 months correlation between Fidelity and Ancora/thelen is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Markets and Ancorathelen Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ancora/thelen Small-mid and Fidelity New 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 New Markets are associated (or correlated) with Ancora/thelen Small-mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ancora/thelen Small-mid has no effect on the direction of Fidelity New i.e., Fidelity New and Ancora/thelen Small-mid go up and down completely randomly.

Pair Corralation between Fidelity New and Ancora/thelen Small-mid

Assuming the 90 days horizon Fidelity New Markets is expected to generate 0.22 times more return on investment than Ancora/thelen Small-mid. However, Fidelity New Markets is 4.49 times less risky than Ancora/thelen Small-mid. It trades about 0.06 of its potential returns per unit of risk. Ancorathelen Small Mid Cap is currently generating about 0.0 per unit of risk. If you would invest  1,260  in Fidelity New Markets on October 26, 2024 and sell it today you would earn a total of  15.00  from holding Fidelity New Markets or generate 1.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Fidelity New Markets  vs.  Ancorathelen Small Mid Cap

Fidelity New Markets

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity New Markets are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Fidelity New is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ancora/thelen Small-mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ancorathelen Small Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Ancora/thelen Small-mid 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 New and Ancora/thelen Small-mid

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

The idea behind Fidelity New Markets and Ancorathelen Small Mid Cap 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.