Correlation Between Aggressive Growth and Fidelity Capital

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

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

Diversification Opportunities for Aggressive Growth and Fidelity Capital

0.42

Correlation Coefficient

Aggressive Growth  Fidelity Capital

Very weak diversification

The 3 months correlation between Aggressive and Fidelity is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Allocation and Fidelity Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Capital App and Aggressive Growth 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 Aggressive Growth Allocation are associated (or correlated) with Fidelity Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Capital App has no effect on the direction of Aggressive Growth i.e., Aggressive Growth and Fidelity Capital go up and down completely randomly.

Pair Corralation between Aggressive Growth and Fidelity Capital

Assuming the 90 days horizon Aggressive Growth Allocation is expected to generate about the same return on investment as Fidelity Capital Appreciation. But, Aggressive Growth Allocation is 1.73 times less risky than Fidelity Capital. It trades about 0.09 of its potential returns per unit of risk. Fidelity Capital Appreciation is currently generating about 0.05 per unit of risk. If you would invest  3,374  in Fidelity Capital Appreciation on October 22, 2024 and sell it today you would earn a total of  976.00  from holding Fidelity Capital Appreciation or generate 28.93% return on investment over 90 days.

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

Aggressive Growth Allocation  vs.  Fidelity Capital Appreciation

Aggressive Growth

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aggressive Growth Allocation are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Aggressive Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Capital App

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Capital Appreciation has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Aggressive Growth and Fidelity Capital

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

The idea behind Aggressive Growth Allocation and Fidelity Capital Appreciation 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.